The Federal Reserve's decision to keep interest rates unchanged reflects a solid economy with caution on inflation.
Jim Bullard, former St. Louis Fed president, appears on Market Domination to discuss the Fed's decision, noting that this move was in line with market expectations.
"This was exactly what markets were expecting, and I do think they updated just slightly to the most recent data with some changes in the statement," Bullard explains. "Not too much going on here; I think they telegraphed for the last 90 days or so that the pace of cuts was probably going to slow down, and that's exactly what's happening here."
Bullard says the Fed is "in great shape right now" regarding the current policy rate. "They can be patient and let the inflation continue to come down, and then they've still got a couple of rate cuts in their pocket if they want to use them," he explains.
Additionally, Bullard does not expect rate cuts this year unless inflation proves persistent, though the Fed could raise rates if inflation rises again.
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This post was written by Josh Lynch