In a recent Stock Trader Network interview on June 17, 2025, Blu Putnam, former chief economist at the CME, dropped a bold prediction: the Federal Reserve might lower interest rates as early as tomorrow, June 18, 2025. While market expectations lean toward rates holding steady, Putnam argues the Fed’s data-driven approach could trigger an unexpected move.

 
Why a Rate Cut Now?
Putnam points to compelling economic signals:

Low Inflation: The Consumer Price Index (CPI) sits at 2.38%, with inflation excluding shelter below 2% for over a year. Services inflation, a major economic driver, is trending down, and goods inflation remains near zero despite potential tariff hikes.

Taylor Rule Insight: This economic model suggests the Fed’s current rate is too high given inflation and unemployment trends, implying cuts are overdue.

Weakening Jobs: Job growth is slowing, with payroll and household data indicating a cooling labor market, raising concerns about economic softening.

Restrictive Policies: Budget cuts, tariffs, and a high Fed funds rate create a restrictive environment, reducing inflation risks and growth stimulus.

Putnam asserts, “The data is piling up… a data-dependent Fed is going to be thinking about cutting sooner.”
Market Odds and Skepticism
The hosts countered with Fed funds futures data, showing just a 12% chance of a July cut and 55% odds of no change through September. Putnam, undeterred, suggests a hint from Fed Chair Jay Powell tomorrow could shift those probabilities fast, noting, “If they start talking about it pretty aggressively, that’ll move that 12.5 to 30 or 40.”
Market Impact
Should the Fed act, Putnam predicts a swift equity rally if there is a cut: “You’re going to get a nice move up in equities.” He sees less upside for bonds, citing a potential dollar weakening.
What’s Next?
Focus turns to tomorrow’s Fed press conference at 2 PM ET. Putnam expects Powell to signal a shift, emphasizing reduced inflation risks and a slowing economy. Whether the Fed cuts rates or merely hints at it, markets could see significant movement.
Putnam’s call stands out as a contrarian take—will it prove prophetic? Tune in tomorrow to find out.
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