Fed: soft data, hard data, no data

At its meeting on 19 March, the Fed neither changed its monetary policy nor showed any intention of changing it in the near future in light of the information available to it. The recent signals are indeed disparate and potentially antagonistic for the two components of its mandate. Almost all FOMC members see downside risks to growth and upside risks to inflation. The median scenario still envisages two policy rate cuts by the end of 2025, but achieving this now looks more uncertain than it did three months ago. Jerome Powell hinted that the price shock caused by the tariffs may prove to be just "transitory", a term that did not exactly prove lucky for the Fed in 2021.