This report by Tiffany Wilding of PIMCO assesses the Federal Reserve’s January policy decision and its implications for the U.S. macro outlook
- The Fed held rates at 3.5%–3.75% after 75 bps of prior cuts, signaling openness to further easing later in 2026 without urgency.
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Improving inflation dynamics, productivity gains from AI, and easing housing costs support a disinflationary trend despite firm growth.
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Policy is viewed as sufficiently restrictive yet flexible, pointing to a gradual, data-dependent easing path.
What signals should investors watch as the Fed navigates the next phase of monetary normalization?
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