How tariffs, economic events can pressure Fed to cut rates
Markets are anticipating one to two interest rate cuts this year, but significant uncertainties persist regarding tariffs and their potential effects on both domestic and global economies. Thomas Hoenig, former president of the Federal Reserve Bank of Kansas City and former FDIC director, joins Catalysts to emphasize that these tariffs could slow down investment and economic activity. "They will have impacts on our domestic economy as well as other economies. Those are things that you can't really know, and so it adds to the uncertainty, and that slows people's so-called animal instincts to invest and to go forward," Hoenig says. With inflation proving sticky, Hoenig notes that unforeseen economic events, such as banking issues, could pressure the Federal Reserve to lower rates. "We still have a very strong labor market," Hoenig remarks, but notes that rising uncertainty and inflationary pressures could ultimately slow the economy, which could create additional pressure on the Fed to lower rates. To watch more expert insights and analysis on the latest market action, check out more Catalysts here. This post was written by Josh Lynch
