Fed Thoughts
Fed Thoughts: The Gambler
Fed Thoughts White Paper
May 2025
Authors & Contributors
Prevailing wisdom suggests the Federal Reserve (Fed) must play the economic hand it’s dealt, and not all hands are winners. However, the outcome may not be based on the cards the Fed is dealt, but how it chooses to play them.
The Fed currently holds a favorable hand, as the US economy’s aggregate demand retains momentum, financial conditions remain easier than when it made the turn toward accommodation, the labor market appears roughly balanced and inflation is sluggishly returning to its 2% goal. However, there are still cards related to trade policy for the Trump Administration to play.
We’ll look at the cards already dealt, the cards left in the deck and how the hand may be played moving forward.
