Why the Fed is Playing Hard to Get with Interest Rates in 2025! 😏

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Ah, dear reader! Gather ’round as we delve into the musings of the illustrious Ed Yardeni, the grand seer of Wall Street, who proclaims with the confidence of a rooster at dawn that the Federal Reserve shall not budge an inch on interest rates! 🐓

In a recent tête-à-tête with CNBC, our sage Yardeni, with a twinkle in his eye, declared that he foresees no easing of monetary policy. Why, you ask? Because the US economy is as resilient as a cat with nine lives, buoyed by the lavish spending of households and the tech titans showering capital like confetti at a wedding! 🎉

“I was not expecting that there would be a Fed rate cut this year. And I still think that because the US economy is very resilient. The consumer hung in there extremely well over the past three years when the Fed raised interest rates. And now the consumer has held up, I think, quite well with the tariff uncertainty,” he quipped, as if he were discussing the weather rather than the fate of our wallets.

“And capital spending, for all the concerns that uncertainty would put a hammer to capital spending, the reality is that technology capital spending, which now accounts for over 50% of total capital spending, remains very strong,” he added, as if to say, “Fear not, for the techies are here to save the day!” 🦸‍♂️

But wait, there’s more! Yardeni, in his infinite wisdom, believes that the charm of US Treasuries will continue to captivate the masses.

“The US is the largest capital market in the world. There’s nothing like it. Sure, we’ve got a lot of debt. But people have been buying that debt because they do want Treasuries,” he mused, as if he were selling fine wine rather than government bonds.

“So no, the worst that can happen in the Treasury market, as we saw in 2023, is yields go up to levels of which people want to buy them. And they got up to 5%, people wanted to buy them. And before you know it, the yield came right back down,” he concluded, with a flourish that would make any playwright proud.

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2025-05-20 17:43