Fed's Timidity and Delay in Rate Cuts

The Federal Reserve, led by Chairman Powell, demonstrated timidity and caution during their recent policy meeting. Despite acknowledging that the policy rate is likely at its peak and considering dialing back at some point this year, the committee did not provide a clear threshold or timeline for rate cuts. The Fed emphasized the need for more good data, specifically regarding inflation, to gain greater confidence in sustaining a path towards 2% inflation. Chairman Powell stated that a rate cut in March is unlikely, but left the door open for adjustments depending on future data. The market reacted negatively to the lack of clarity, with equity markets selling off while bond markets rallied.