📝Expect Only One Fed Rate Cut In 2H: Rabobank

We expect the FOMC to keep the target range for the federal funds rate unchanged at 4.25-4.50% on June 18.

The formal FOMC statement and Powell’s press conference are likely to stress again that the Committee is waiting for more clarity about trade policy and the impact of tariffs on the

economy.

However, the new dot plot will already reveal how many rate cuts the FOMC still expects to make this year and beyond.

The stagflationary impact of the tariffs is likely to pull the Fed in two opposite directions. On balance, we think that the Fed will therefore be slow and modest in its reactions. For now, we

expect only one rate cut in the second half of the year, most likely in September.

The Israel-Iran war could amplify these stagflationary forces. On balance, this does not alter

our forecasts for the Fed. - Rabobank