Salman Ahmed, Head of Global Macro and Strategic Asset Allocation at Fidelity International, stated that the Federal Reserve cut interest rates by 0.25% as expected, lowering the federal funds rate target range to 4% to 4.25%. Looking ahead, the firm expects the Fed to implement two more rate cuts this year before pausing, with future Fed responses likely to become increasingly unpredictable.

The Fed's statement reiterated concerns about labor market deterioration and described inflation as only "slightly elevated," indicating that the Fed has shifted its focus toward the labor market rather than worrying about upside inflation risks. The Fed's Summary of Economic Projections also highlighted this policy shift and confirmed market pricing expectations for two additional rate cuts this year.

However, when forecasting interest rate trends for 2026, considering that the Fed may be led by a new chair starting in May 2026, this implies a greater possibility of increased rate cuts, which would be inconsistent with the 2% inflation target. Additionally, recent comments from Treasury Secretary Bessent and others suggest the government desires broader reforms at the Federal Reserve.

All of these developments indicate that future Fed responses may differ significantly from past patterns. Therefore, attention should be focused not only on policy decisions but also on understanding the political dynamics driving policy decisions behind the scenes.