Based on Powell’s comments:
The labor market has stabilized, yet inflation remains elevated. Near-term inflationary pressures have increased due to tariffs.
Federal Reserve Chairman Powell stated that inflation is rising and that progress on curbing it is “probably delayed for the time being.”
GDP growth is moderating.
Quantifying the precise impact of tariffs on inflation will be challenging.
The Federal Reserve is maintaining a cautious stance on interest rate adjustments, awaiting greater clarity on economic conditions. The probability of a recession has risen, though it is not yet high.
The Fed is reducing the monthly runoff of Treasuries from $25 billion to $5 billion. The latest dot plot indicates a mildly more hawkish stance.
Current expectations point to two rate cuts in 2025. In its most recent policy statement, the Fed omitted the phrase “risks are balanced,” which had appeared in the prior statement.
Regarding key SPX components, here are a few charts
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