“You never know because everything changes and turns on a dime in this world, but it’s quite unlikely that the Fed is going to cut rates this year at all,” she said. “Certainly not at least through the summer, and things would have to change pretty radically for the Fed to be in a position to vote to cut rates.”
Don’t expect Warsh to wave a magic wand and lower rates
While many view Warsh, Trump’s nominee to replace Powell, as more receptive to the president’s views on rate policy and possible cuts, Cohn doesn’t see him being able to bring rates lower at the drop of a hat – not least because he’s just one of 12 Federal Open Market Committee (FOMC) members with a say in each decision.
“For [Warsh], the only argument he could make would be if we see the economy faltering, that you have to cut rates to prop up the economy even if inflation remains high,” she said. “But then, that’s a dangerous world to be in.
“I think that people are hoping that this war in Iran will end at some point, hopefully sooner versus later, although it doesn’t appear to be that way.”
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