Although some speculate that the Federal Reserve may raise interest rates unexpectedly on Wednesday, Tom Lee, market strategist at Fundstrat Global Advisors, believes this will not happen easily, mainly based on recent progress in inflation. The composition of the latest inflation data shows that housing costs and other key segments are slowing down, leaving room for the Federal Reserve to keep interest rates unchanged. Therefore, it would be surprising if the Federal Reserve, which has always attached importance to “data collection,” believes that inflationary pressure is still strong based on superficial phenomena. Admittedly, inflation has yet to return to 2%, but the impact of tariffs and higher oil prices are distorting these figures. However, the Federal Reserve may consider further reducing the size of asset holdings on its balance sheet.

Although some speculate that the Federal Reserve may raise interest rates unexpectedly on Wednesday, Tom Lee, market strategist at Fundstrat Global Advisors, believes this will not happen easily, mainly based on recent progress in inflation. The composition of the latest inflation data shows that housing costs and other key segments are slowing down, leaving room for the Federal Reserve to keep interest rates unchanged. Therefore, it would be surprising if the Federal Reserve, which has always attached importance to “data collection,” believes that inflationary pressure is still strong based on superficial phenomena. Admittedly, inflation has yet to return to 2%, but the impact of tariffs and higher oil prices are distorting these figures. However, the Federal Reserve may consider further reducing the size of asset holdings on its balance sheet.