Research Library

Blake Huber

Signs Federal Reserve policy is not restrictive are appearing with increasing frequency. Economic data in the United States has been steadily strengthening after bottoming at the end of 2024. The 4 year rally in equities has continued its upward march, hitting new all time highs almost on a monthly basis.

Blake Huber

Up until last month, the market priced in 2 additional interest rate cuts for 2026. After the Federal Reserve meeting in March, the market is now pricing in a rate increase in Q4 of 2026. This is a dramatic swing of 75 bps of tightening. Despite comprehensive calls for a U.S. recession in the last 2 years, the opposite appears to be occurring. There is wide-ranging evidence the economy is accelerating. This acceleration is unwelcome as inflation is still dramatically above the Federal Reserve target of 2% and will be exacerbated by expanding economic pressures.