The Federal Reserve (Fed) has maintained a restrictive tone in its last two monetary policy decisions, keeping its benchmark interest rate unchanged, primarily due to the current tariff dynamics. Joaquín Barrera, director of fixed income at Sura, pointed out that the United States is exhibiting controlled inflation, in line with the central bank's objectives, and a stable economic activity. Despite these favorable indicators, the Fed remains reluctant to cut interest rates due to these tariff dynamics.
Barrera mentioned that although the market expects around four rate cuts for the remainder of the year, he considers that two cuts of 25 basis points by the Fed are more plausible. He highlighted the current uncertainty and the need to observe how these tariff dynamics could affect the economy, whether companies pass those additional costs onto consumers or if product substitution occurs.
For his part, Valentín Martínez, vice president of product management and advisor at Sura, pointed out the importance of labor stability in the Fed's decisions, arguing that recent resilience has been observed in the U.S. labor market, which would not justify an immediate reduction in interest rates. Martínez emphasized that it will be crucial to observe how Fed chairman Powell addresses these issues in the upcoming comments and the certainty he can provide regarding long-term inflation dynamics.
