The Fed won't immediately "look through" energy inflation. It must first confirm that tariff-related inflation has passed. Only then will it decide whether to ignore a supply-side energy shock. This multi-layered process raises the bar for easing and pushes rate cuts later into the year.
A quantitative analysis of the FOMC press conference showed inflation and oil-related terms appeared five times more frequently than labor market terms. This overwhelming focus on price stability makes it difficult for the Fed to convey a dovish message, shaping market perception towards a more hawkish stance.
While the Fed sees the labor market as balanced due to stable unemployment, it is not dynamic. Job growth is minimal (20k-30k monthly average), and turnover has slowed. This fragile equilibrium, rather than strength, could justify future rate cuts if consumer or business spending falters.