Hedge fund Rokos executive: Fed unlikely to cut interest rates this year

Richard Tang, global head of markets at hedge fund Rokos Capital Management, believes the Fed is unlikely to loosen monetary policy this year.

Richard Tang, global head of markets at hedge fund Rokos Capital Management, believes that the Federal Reserve is unlikely to loosen monetary policy this year.
Tang said the path of inflation has become very difficult to predict, especially in the context of the presidential election later this year.
The market currently expects two interest rate cuts this year.
The Fed is unlikely to be able to cut interest rates this year, Tang said Thursday.
We have a very important presidential election coming up. It does affect policy. So once you take all of that into account, it\’s almost a 50-50 bet on whether the next meeting will cut rates or raise rates.
He said central banks have become addicted to providing forward guidance, and forecasts have become dangerous for monetary policy makers.
He added that recent history shows that markets should not rely on economic data to predict the central bank\’s next policy move.
The market has an assumption that it can be inferred from these data. He said that although the U.S. CPI data on Wednesday seemed to have eased, the six-month rolling CPI is still close to 4.1%. There is still some distance from the Fed\’s 2% target.
In addition, he said policies of any administration could push up inflation. And uncertainty over potential tariff action by the Trump administration makes it particularly difficult for the central bank to price future policy actions.
Previously, Citadel founder Ken Griffin said that both Donald Trump and Joe Biden were unlikely to reduce U.S. federal spending. This would pose a major obstacle to reducing U.S. inflation.
\”We are in a new system,\” Tang added.
The traditional correlations of econometric models no longer apply.
How inflation actually works. I don\’t think anyone really knows.
Billionaire Chris Rokos manages one of the world\’s largest macro hedge funds, with assets exceeding $17 billion.
The fund he manages is known for its large bets and high degree of certainty. It has risen 20% this year.

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