The Fed and the interest rate dilemma. Analysts’ forecasts

The next one will be there central banking week. Among these, special observation it’s there Fed vicina al change at the top and under the constant pressure of the President Donald Trump which drives why lower the cost of money. Despite this, however, the outgoing president Jerome Powell should leave rates unchanged between 3,50% and the 3,75%living up to the image of independent man e inflexible all political pressures.

I US judges they have closed the criminal investigation against the President Powella turning point that could pave the way at the he confirms by the Senate Of Kevin Warsh come governor from the US central bank. According to the 99,6% of the analysts the American central bank will leave i firm rates.

The attention of the markets

Per Richard Flax, chief investment officer Of Moneyfarm“il interest rate path subtracts from center of attentionalso in light of repeated statements of the President Donald Trumpwhich he has several times desired and easing of monetary policy American. In this contextEverything is fine indication coming from Federal Reserve is observed with particular interestespecially for orient yourself on next moves from the Central Bank“.

Kevin Warsh’s audition

This week, Kevin Warshindicated by Trump Which next governor from the Fedha testified in front of the Senate Banking Committee. “Wars reiterated theimportance of independence from the Central Bank in the definition from the monetary policywhile underlining how the Fed was, in his opinion, excessively involved nell’economyespecially through the Quantitative Easing“, he highlights again Flax.

Jp Morgan’s forecasts

Per Jp Morgan Global Researchthe Fed will keep i firm rates per all year round in progress “before increase them Of 25 basis points (bp) In the third quarter of 2027” Despite “economic risks arising from conflict in the Middle East“. However “the Fed could be cut rates if he labor market and weakened significantly a no economic repercussions dell’increase in energy prices and worsened“.

The scenario according to State Street

It is less clear Noel Dixon, senior macro strategist Of State Street Marketsaccording to which “under the leadership Of WarsAnd likely that the Fed hire a more accommodating orientation. I believe inside the Board of Governors one can be formed coalition – Michelle Bowman, Christopher Waller, Stephen Miran e Kevin Warshthat is to say four out of seven members – which will tend towards one dovish line. Furthermore, John Williams is known to be very sensitive all’performance of the stock markets. Se i markets they weren’t satisfied from the lack of rate cuts and one would occur negative reaction on the part of technology companies, Warsh reagirebbe. Considering this possible coalition inside the Board della FedI think plausible attend one or two rate cuts within the end of the year“.