🇺🇸 Fed Holds Steady on Rates: Balance Sheet Shrinks, Tariffs Cloud Outlook

The Federal Reserve’s balance sheet declined by $2.6 billion over the past week, yet officials maintain a hawkish tone.
Regional Fed presidents emphasize patience, as inflation remains above target and tariffs introduce new economic uncertainty.

📌 Key Takeaways from Fed Officials:

— Hummer: No reason to rush — tariff effects are already being felt
— Collins: Inflation may reach 3% by year-end, with slower hiring and growth
— Logan: Policy remains tight, but rate cuts possible if labor market weakens
— Williams: Sees 2% inflation only by 2027, growth slowing to 1%
— Waller: Open to a July cut if data supports it
— Goolsbee: Tariffs are a drag, but multiple soft CPI prints could shift policy

📊 Futures Market Expectations:

— July 30: Hold
— September 17: -25 bps
— October 29: Hold
— December 10: -25 bps
— March 18, 2026: -25 bps

🧭 Bottom Line:
The Fed is signaling patience amid tariff-driven uncertainty. Rate cuts remain on the table, but any easing will be gradual and data-dependent, requiring clear and sustained inflation decline.