Biden Considers Rate Cut Delay Amid Higher Inflation

Following the release of higher-than-expected inflation data in the USA, both FED official Barkin and President Joe Biden addressed the issue separately.

Barkin, expressing optimism about inflation progress, stated, “I think we have made a lot of progress on inflation.” Additionally, he forecasted rapid development in artificial intelligence, foreseeing its potential to replace certain jobs. Despite concerns, Barkin dismissed the notion of commercial real estate (CRE) posing a systemic risk, stating, “I don't see any suggestion that CRE is a systemic risk.”

In his latest statement, President Biden acknowledged the inflation decline, noting a decrease of more than 60% compared to the peak, but emphasized the need for further action. While reassuring the public of the administration's plan to address inflation, Biden hinted at the possibility of a delay in interest rate cuts due to inflation news. He stated, “Inflation news may delay the rate cut, but I don't know what the FED will do, but there will be a rate cut before the end of the year.”

Following the inflation report, investors are opposed to the FED initiating interest rate cuts in June, viewing a later start as more probable. Goldman Sachs, in particular, anticipates the FED's first interest rate cut to occur in July instead of June.