There will be no interest rate cut by the Federal Reserve this year.

Forget about interest rate cuts this year. The Federal Reserve is unmoved, no matter how much Wall Street begs. Inflation remains stubborn, the labor market refuses to cool down, and the government is accumulating deficits as if there's no tomorrow. According to the US Federal Reserve, the Fed will not cut interest rates until 2025. "Inflation remains above target," economist Stephen Juneau said. "The economy is strong and the labor market appears to be stable." This is not what anyone wants to hear. Just a few months ago, Fed officials hinted at a one percent interest rate cut in 2025. By December, that number had been cut in half. Report on inflation and the labor market never sleeps This week, all attention is focused on two reports from the General Statistics Office. The Producer Price Index (PPI) dropped on Tuesday, followed by the Consumer Price Index (CPI) on Wednesday. Both will show how persistent inflation still is. There was a 0.3% increase in December for the PPI, with core (excluding food and energy) figures rising similarly. The annual PPI rate for November reached 3%, while core inflation reached 3.5%—the highest since February 2023. CPI does not seem much more optimistic. Forecasters expect headline inflation to rise 0.3% and core inflation to rise 0.2% in December. On an annual basis, those figures correspond to 2.9% and 3.3%. The Federal Reserve wants inflation at 2%. These numbers scream, "Not happening". Meanwhile, the labor market continues to complicate everything. The December non-farm payroll report showed an additional 256,000 new jobs and the unemployment rate dropped to 4.1%. The Fed's dual mandate of stabilizing prices and full employment is conflicting, making rate cuts nearly impossible. Juneau even suggests that the Fed may go in the opposite direction. "The risk for the next move is leaning towards raising interest rates," he said. The Fed relies on the Personal Consumption Expenditures (PCE) price index to forecast inflation, but both the PPI and CPI are included in that data. If core PCE inflation exceeds 3% or long-term inflation expectations are not anchored, a discussion on raising interest rates may be revisited. Currently, the central bank is expected to keep interest rates unchanged. According to CME Group's FedWatch tool, there is almost no chance of a change in interest rates at the meeting on January 28-29. For the rest of the year, traders are leaning towards the possibility of no interest rate cuts. Government deficit and soaring debt While the Federal Reserve grapples with inflation and employment, the federal government is mired in debt. The deficit for December is $86.7 billion, which sounds like an improvement—until you look at the big picture. The first quarter of the fiscal year witnessed a staggering deficit of $710.9 billion, a remarkable 39.4% increase compared to the same period last year. Increased spending, decreased tax revenue, and soaring financial costs. The national debt has now exceeded 36 trillion dollars. Interest payments alone have reached $308.4 billion so far in the 2025 fiscal year, up 7% from last year. By the end of the year, those costs are expected to exceed 1.2 trillion dollars, breaking the record set in 2024. The government spends more on interest than anything else—except for Social Security, defense, and health care. The silver bond yield does not help. While short-term interest rates remain stable, long-term interest rates are rising. Recently, the 10-year silver bond yield has reached 4.8%, up 0.4 percentage points in just one month. Rising yields make the government more expensive to borrow, adding to the already massive debt burden. At the same time, government spending is skyrocketing. Spending in the first quarter is over 11% higher than last year, while tax revenue is down 2%. This is a brutal combination with no signs of stopping. This financial turmoil makes it even harder for the Fed to justify interest rate cuts. Cutting interest rates could fuel inflation, which is the last thing anyone wants right now. DYOR! #Write2Earn #USPPITrends $BTC {spot}(BTCUSDT)