Fed Fails to Deliver: No Rate Cuts on Tap in July

The Federal Reserve is set to meet in July, and investors expect the central bank to keep interest rates unchanged. Despite President Trump's calls for rate cuts, the Fed has signaled it will not act. This decision will be a blow to the president, who has been vocal about his desire for lower rates.

The meeting comes as the US is experiencing inflationary pressures due to rising oil and gas prices. The conflict in the Middle East has led to volatility in energy markets, making it difficult for policymakers to predict future trends. Despite this uncertainty, traders believe the Fed will stick with its current policy, citing a September quarter-point rate hike as the base-case scenario.

Some experts argue that hiking rates could derail the economy and hurt employment, but others believe it is necessary to prevent inflation from rising further. The Fed's decision will be closely watched, especially given the recent surge in Treasury yields. The two-year yield has risen almost 100 basis points this year, and the ten-year bond rate is above 4.5%. The Fed's next move will depend on economic data, which is expected to improve in the coming months.