Federal Reserve's Stance on Interest Rates

The Federal Reserve's recent decision to minimize the number of expected rate cuts has significant implications for the economy. Economic data suggests that inflation remains above the target, and the labor market, though slightly weakened, is still robust. This scenario indicates that aggressive monetary easing may not be necessary, as fiscal stimulus supports economic activity. As a result, bond market volatility is expected to persist, yet there remains an opportunity for investors to capture value in bonds, with a favorable risk-to-reward ratio.