The Fed's cutting cycle appears to be over as economic conditions shift. Six months ago, the uncertainty surrounding rising unemployment rates and inflation prompted a series of rate cuts to support the labor market. However, the current labor market has shown substantial improvement, with the unemployment rate dropping significantly since December. Consequently, the Fed has little reason to implement further cuts based on employment outcomes alone. Recent inflation data, particularly a notable rise in Core CPI at 0.4%, reveals persistent inflation challenges, especially in goods and services prices. Inflation remains above the Fed's 2% target, oscillating between 3-4%. As long as inflation trends upward, expectations for rate cuts have shifted from March to the end of the year, indicating a tighter monetary policy approach moving forward.

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