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May 05, 2025

Preview: Fed To Keep Rates Unchanged and Signal Being on Hold, Given Heightened Tariff-Induced Inflation Concerns

Nouriel Roubini

Brunello Rosa

Nato Balavadze

by Nouriel Roubini, Brunello Rosa and Nato Balavadze

In this paper we discuss:

The latest assessment by the Fed of the US economy, which has contracted in Q1 2025;
Why we expect the Fed to remain on hold in May and likely also in June;
That the economy has performed worse than expected in the December 2024 Projections;
The market reaction to a press conference likely to be more hawkish than the market expects.