The recent inflation report came in cooler than expected at 2.8% in February, from 3% in January. It’s still higher than the Federal Reserve’s target of 2%, but it’s low enough for the Fed to start cutting interest rates again. Interest rate cuts were previously paused due to inflation holding moderately high, but now that it has started going down again, the market is betting that rate cuts will resume in June.
It’s still worth mentioning that they may not happen. Tariffs are still causing a lot of uncertainty for the U.S. economy, and they can drive inflation up. The University of Michigan sees inflation at nearly 5% a year from now. This is much higher than the Fed’s own estimate of 3.1%. But it’s not a bad argument that the Fed could cut rates nonetheless due to the negative GDP forecast and its own data that shows tolerable inflation a year out.
Here are 2 stocks that could benefit from a June rate cut.
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