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Fed & yields

Double Threat: Elevated Core PCE and Impending Tariffs Complicate Fed’s Path Forward

Fed Takes Conservative Stance on 2025 Rate Cuts
Fed Takes Conservative Stance on 2025 Rate Cuts

US core inflation remains elevated at an estimated 2.7% annual pace for February, keeping the Federal Reserve cautious about rate cuts.

Fed officials are monitoring the potential impact of President Trump’s planned April 2 “Liberation Day” reciprocal tariffs, which could further pressure prices.

This economic uncertainty, combined with recent consumer spending growth and income moderation, has led the Fed to maintain current interest rates while they assess how the administration’s trade policies will affect inflation and economic activity.

Eight more from the desk

Other dispatches from the bullion wire.

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