The Fed is wise to adopt a wait-and-see stance while Norges Bank surprised virtually everyone with a cut this week. Geopolitical developments cloud the outlook for central banks. As expected, the Federal Reserve left the funds rate unchanged this week in the range of 4.25-4.50%. Amid ongoing uncertainty stemming from Trump’s trade and tax policies and geopolitical conflicts, the Fed continues its cautious and data-dependent stance. So far this year, the average tariff rate on goods imports to the US has gone up from around 2% to 15.8%, giving rise to renewed inflationary pressures. However, so far core PCE inflation ... (full story)