Overview
- President Donald Trump told reporters he wants the Federal Reserve to cut rates but said he will defer to the Fed’s new chair to make that call.
- Recent data show a resilient labor market and elevated inflation, with nonfarm payrolls increasing more than expected in May and headline inflation near 3.8 percent.
- Fed officials have warned that rising oil-driven prices could keep inflation high and make further rate increases appropriate if the pressure persists.
- Investors have rapidly repriced policy odds, with the CME Group FedWatch tool moving the chance of at least one rate hike this year from roughly 50 percent to about 70 percent.
- The next test comes at the Fed’s June 16–17 FOMC meeting when the new chair will signal the likely policy path and face the choice between supporting growth or tightening to curb inflation.