Monetary Policy
- The FOMC announced today it will keep the Federal Funds target rate unchanged. The current target range of 3.50 – 3.75% was established at the committee’s previous meeting in December. This marks the first time the Fed has not reduced rates since July 2025, an outcome which was widely anticipated by the market.
- The decision was cast with dissenting votes from two members, Stephen Miran and Chris Waller, who each favored a 25 basis point cut. Despite the dissent, in the press conference, Powell stated there was broad support for today’s decision, including among non-voting members of the committee.
- New wording suggested the committee has adopted a slightly more constructive view of the economy. The statement eliminated a previous reference to the downside risks to employment growth and mentioned signs of stabilization in the unemployment rate.
- Market reaction was muted. The S&P 500 ended the day down 0.01%, while the yield on the 10-year US Treasury was mostly unchanged, at 4.25%. (Source: Bloomberg)
- As is the norm, Powell declined to answer any questions surrounding political topics. With Powell’s term as Fed chair set to end in May, interest continues to swirl over a potential successor. Powell noted today he has not made a decision on whether he will remain as a Fed Governor and would not provide further information on the topic. Fed chairs have typically resigned following the end of their term as chair.
Economic Conditions
- The Committee came into this meeting with US GDP clocking in at 4.4% annualized for Q3 2025 and the Atlanta Fed’s GDPNow model forecasting a 5.4% annualized rate for Q4. US CPI was 2.7% in 2025. (Source: US Bureau of Economic Analysis, Atlanta Fed, Bureau of Labor Statistics)
- Powell highlighted the potential stabilization of labor markets during the press conference and specifically mentioned the Committee’s decision to eliminate the reference to downside risks. He noted that this was based on a review of conflicting data.
- It was reiterated that the Fed’s view on tariffs favors a one-time impact on inflation, and this is expected to play out over time. The current estimate is that the impact from tariffs will top out around the middle of the year.
- Powell indicated the upside risks to inflation and downside risks to employment have diminished but are “still in tension”. Powell was not willing to say they are in balance.
The FOMC is next scheduled to meet March 17 – 18th, 2026.
Disclosures
The views expressed herein are those of Asset Consulting Group (ACG). They are subject to change at any time. These views do not necessarily reflect the opinions of any other firm. This report was prepared by ACG for you at your request. Although the information presented herein has been obtained from and is based upon sources ACG believes to be reliable, no representation or warranty, express or implied, is made as to the accuracy or
completeness of that information. Accordingly, ACG does not itself endorse or guarantee, and does not itself assume liability whatsoever for, the accuracy or reliability of any third-party data or the financial information contained herein.
Certain information herein constitutes forward-looking statements, which can be identified by the use of terms such as “may”, “will”, “expect”, “anticipate”, “project”, “estimate”, or any variations thereof. As a result of various uncertainties and actual events, including those discussed herein, actual results or performance of a particular investment strategy may differ materially from those reflected or contemplated in such forward-looking statements. As a result, you should not rely on such forward-looking statements in making investment decisions. ACG has no duty to update or amend such forward-looking statements.
The information presented herein is for informational purposes only and is not intended as an offer to sell or the solicitation of an offer to purchase a security.
Please be aware that there are inherent limitations to all financial models, including Monte Carlo Simulations. Monte Carlo Simulations are a tool used to analyze a range of possible outcomes and assist in making educated asset allocation decisions. Monte Carlo Simulations cannot predict the future or eliminate investment risk. The output of the Monte Carlo Simulation is based on ACG’s capital market assumptions that are derived from proprietary models based upon well-recognized financial principles and reasonable estimates about relevant future market conditions. Capital market assumptions based on other models or different estimates may yield different results. ACG expressly disclaims any responsibility for (i) the accuracy of the simulated probability distributions or the assumptions used in deriving the probability distributions, (ii) any errors or omissions in computing or disseminating the probability distributions and (iii) and any reliance on or uses to which the probability distributions are put.
The projections or other information generated by ACG regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Judgments and approximations are a necessary and integral part of constructing projected returns. Any estimate of what could have been an investment strategy’s performance is likely to differ from what the strategy would actually have yielded had it been in existence during the relevant period. The source and use of data and the arithmetic operations used for calculating projected returns may be incorrect, inappropriate, flawed or otherwise deficient.
Past performance is not indicative of future results. Given the inherent volatility of the securities markets, you should not assume that your investments will experience returns comparable to those shown in the analysis contained in this report. For example, market and economic conditions may change in the future producing materially different results than those shown included in the analysis contained in this report. Any comparison to an index is for comparative purposes only. An investment cannot be made directly into an index. Indices are unmanaged and do not reflect the deduction of advisory fees.
This report is distributed with the understanding that it is not rendering accounting, legal or tax advice. Please consult your legal or tax advisor concerning such matters. No assurance can be given that the investment objectives described herein will be achieved and investment results may vary substantially on a quarterly, annual or other periodic basis. There is no representation or warranty as to the current accuracy of, nor liability for, decisions based on such information.
Gryphon Financial Partners shall not in any way be liable for claims and make no expressed or implied representations or warranties as to their accuracy or completeness or for statements or errors contained in or omissions from them. This was created for informational purposes only. Gryphon Financial Partners, LLC is an Investment Adviser.