Analyst: Fed May Delay Rate Cut Due to Tariff Risks

UOB economist Alvin Liew stated that due to tariff risks, the Federal Reserve might delay rate cuts. Fed Chair Powell mentioned that central bank officials are not in a hurry to adjust rates because "the cost of waiting is quite low," according to the economist. Given that the Fed continues to express patience while warning of the risks of inflation and rising unemployment due to U.S. tariffs, UOB still believes there will be three rate cuts in 2025, each by 25 basis points. The economist said UOB has postponed the expected timeline to the meetings in September, October, and December. UOB still anticipates two rate cuts in 2026, implying that the federal funds rate will drop to 3.25% next year.