Summary

• Markets and observers weren’t surprised when the Federal Reserve held its policy rate steady at the April meeting.
• Our view remains that the next move will be a rate cut, but the timing is far from clear.
• Eventually, as energy prices moderate (assuming they do), the Fed could still cut a few more times to align the current policy range of 3.5%–3.75% with the Fed’s median estimate for neutral policy of roughly 3%.

Markets and observers weren’t surprised when the Federal Reserve held its policy rate steady at the April meeting. More notable, in our view, were the three dissents by voting participants who did not support keeping the implicit

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