BNY Investments Chief Economist Vincent Reinhart joins Market Domination Overtime to discuss his outlook on the Federal Reserve’s monetary policy in 2025.
“The Fed’s real problem… is that their concerns about inflation wasn’t last month’s shelter number, wasn’t the general slow-moving nature of sticky price inflation, that’s all backward-looking,” he explains. “The problem for the Fed is forward-looking that if the White House puts in place some of the policies it’s discussing that will add to inflation.”
Regarding potential interest rate hikes in 2025, Reinhart notes the Fed still “has some margin between where it is now in its overall position of policy and the point… where it raises rates.” He explains that with guidance still pointing to rate cuts, “the first defense” would be to revise the guidance upward, calling it “the equivalent of tightening policy.”
“If you can convince markets that rates are gonna be tighter for a long time in the future, you don’t actually have to move right now,” he tells Yahoo Finance.
To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here.
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