Analysts: The Federal Reserve will prioritize protecting the labor market

Harvey Bradley, the Fed's co-head of global interest rates at Insight Investment, said in a note that the rate-cutting environment could be good news for those who invest in U.S. bonds through a globally diversified fixed-income portfolio. While tariffs could still lead to higher inflation, the Fed is expected to cut rates on Wednesday. Markets will be closely watching the Fed's latest "dot-plot" forecast for future rate cuts beyond September, given relatively stubborn inflation in the United States. In our view, while inflation could complicate the outcome, we believe the Fed will be prepared to "ignore" above-target inflation to protect the labor market.