May 2025 FOMC Preview: Inaction is action (and a potential policy mistake)…

George Goncalves, Head of Macro Strategy in the Americas previews our expectation ahead of the May FOMC meeting. We believe that the Fed will skip for a third time in the cycle and have a difficult time threading the needle and making everyone happy at this upcoming meeting. If the Fed elects to stay on the sidelines to wait for data to confirm that further rate cuts are needed, they might realize that they will come too late. If the Fed messaging comes across as more hawkish than markets would like, it could result in risk assets to continue giving back recent returns.