Fed Unlikely to Cut Rates for Foreseeable Future

Mortgage rates will remain the same in April, according to inflation data. Persistent tariff-induced inflation pressures suggest that the Federal Reserve will likely pause any rate cuts in the future.

There is a significant reduction in U.S.–China tariffs—from 145% to 30% on Chinese imports and 125% to 10% on U.S. goods. Recession risks have diminished, leading to a more optimistic economic outlook. However, inflation concerns persist due to elevated tariff levels, which remain substantially higher than pre-2025 rates, suggesting that the Federal Reserve may delay anticipated rate cuts.

According to RedFin News, “The BLS reported that core prices rose 0.24% from March to April and are up 2.8% from a year ago, largely in line with expectations of a 0.26% increase. Tariffs on Canada, Mexico, and China—as well as autos, steel, and aluminum—predated these data, but the April 2 (“Liberation Day”) tariffs were coincident. As such, there are only hints of the tariff impact in this report. Airfares were once again weak, falling 2.8% from a month ago, and hotel prices fell 0.2%, reflecting an ongoing decline in foreign tourism. However, goods prices fell with apparel, declining 0.2% from a month ago, indicating no immediate impact from tariffs. This makes sense as new research from the Fed shows that the price impact hits about two months after tariff implementation.”

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