Macro
Fed Holds Rates — Powell Signals No Rush to Cut
The FOMC voted unanimously to hold at 4.25–4.50%. Chair Powell's press conference struck a notably patient tone, pushing rate cut expectations further into late 2026.
The Federal Reserve held the federal funds rate at 4.25–4.50% at its May meeting, in line with universal market expectation. The decision was unanimous.
Chair Powell opened his press conference emphasising that the labour market remains strong — April non-farm payrolls came in at 177,000 with the unemployment rate steady at 4.1%. He noted that inflation has continued to move toward the 2% target but stressed the committee wants “greater confidence” before beginning the easing cycle.
The updated dot plot showed the median member now projects one 25bp cut in 2026, down from two cuts projected in March. Three members project no cuts this year.
Market implications for growth equities:
The “higher for longer” dynamic is net neutral for quality growth names that are free cash flow positive. The real pain falls on pre-revenue or heavily dilutive issuers. For CANSLIM stocks, the key watch is whether the 10-year remains below 4.65% — above that level, multiple compression tends to overwhelm earnings beats for even high-quality growers.
Current 10-year yield: 4.41%. The near-term setup remains constructive.