Fed officials want to see ‘further progress’ on inflation before trimming interest rates again, as per the latest meeting minutes.

🚀 S&P 500 Hits Another Record

• The S&P 500 index (SPX) powered higher Wednesday, closing at a new all-time record, back to back with its Tuesday record-setting performance. The broad Wall Street benchmark clocked 0.2% for the session, or about 15 points, signing off at 6,144.15. It was the second record close of the year.
• Stock market enthusiasts dived into the risky assets despite the Federal Reserve sounding the alarm bells over possible inflation pressures due to the looming tariffs.

🚨 Fed Minutes Ring Some Alarm Bells

• The Fed late on Wednesday released its minutes from the meeting three weeks ago. In the summary, Fed boss Jay Powell and his clique of central bankers struck a cautious note on the tariff outlook and said they will likely hold off further interest rate cuts and see where inflation is going to go.
• “Many participants noted that the committee could hold the policy rate at a restrictive level if the economy remained strong and inflation remained elevated," the minutes said.

🎶 Tariff Drama, Investor Panorama

• The tariff drama appears to be swaying investors who are one day worried about deteriorating global trade and the next day hopeful about America’s bright outlook. The bottom line for the Fed, however, is that Trump’s tariff agenda could send inflation higher, causing all sorts of trouble for the economy.
• In this light, the central bank is prepared to hold interest rates at current levels until the outlook clears up a bit (i.e. see how the tariffs play out).