The presence of absence

Federal Reserve policy is likely to stay on hold for now, as the latest meeting showed unusual dissent and growing caution around inflation risks tied to the Iran conflict. Powell’s transition adds another layer of uncertainty, but any new leadership is expected to preserve Fed independence and remain data-driven.

At the same time, money market funds continue to attract significant assets, underscoring investors’ preference for liquidity and yield in a more uncertain environment. Even with a sharp weekly outflow around Tax Day, balances remained near record levels, showing that cash remains parked rather than fleeing.

For investors and advisors, the near-term backdrop favors patience over aggressive rate bets. Inflation pressures, geopolitical risk and policy transition noise all argue for keeping a close watch on cash positioning while waiting for clearer signs of easing later this year.