US Weekly: Fed operating in the dark

The Fed is struggling to provide forward guidance without clear policy direction from the new administration. Even though rate-setters expect core PCE inflation to end the year at close to 3%, the median FOMC projection still shows two interest rate cuts in 2025, a fact Powell put down to the "highly uncertain environment" causing "inertia" among FOMC participants, rather than a deliberate policy stance. We remain sceptical the Fed will cut interest rates this year with inflation so far above target.