FOMC Still Data Dependent in Uncertain Policy Environment

Founder & Head of Research, Fortress Hill Advisors

Alex Ng

Founder & Head of Research

Fortress Hill Advisors

Founded in Hong Kong in 2019, Fortress Hill Advisor seeks to provide premium economic and financial researches.

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Macroeconomics

<ul>
<li>Strength in January CPI does in part reflect residual seasonality, but continued stalling of progress in yr/yr growth is of concern.</li>
<li>This revives concerns that the economy may need to slow to return inflation to the 2.0% target, something tariffs are likely to make more difficult.</li>
<li>Uncertainty is high, but we now expect only one 25bps easing in 2025, which is likely to come late.  We expect the Fed to remain cautious through 2026.</li>
</ul>


Strength in January CPI does in part reflect residual seasonality, but continued stalling of progress in yr/yr growth is of concern.
This revives concerns that the economy may need to slow to return inflation to the 2.0% target, something tariffs are likely to make more difficult.
Uncertainty is high, but we now expect only one 25bps easing in 2025, which is likely to come late.  We expect the Fed to remain cautious through 2026.


FOMC View: One 25 Bps Easing in Late 2025 and Two 25bps Easings in 2026