Fed Rate Policy Update: Are Cuts on the Horizon?

In May, the Fed decided to hold rates steady at 4.25%–4.5%, alongside signs of easing inflation and a softening labor market. Despite these changes, a recession seems unlikely in 2025. The yield curve has modestly normalized, with the 10-year Treasury now yielding more than the 2-year. While rate cuts are expected in September and possibly once more before year-end, markets project a higher-for-longer rate environment compared to the near-zero rates of the 2010s—a scenario that benefits savers but poses challenges for borrowers.

If you have any questions about how these trends may shape your investment strategy, speak with your financial advisor.

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