The Globe and Mail reports in its Friday edition that amid increasing political pressure for the Federal Reserve to cut interest rates, Chair Jay Powell is managing the loosest financial conditions in the U.S. since early 2022. A Reuters dispatch to The Globe reports that the debate over the Fed's next steps is complex. While the Fed's modelling indicates a moderately "restrictive" policy due to persistent inflation and low unemployment, the Chicago Fed's index shows that financial conditions are at their lowest in over three years, indicating ample financing in the economy. The index reflects a range of financial inputs, including interest rates and equity prices. Its decline is likely due to the U.S. stock market's rebound, the dollar's drop and a 20-per-cent year-on-year decline in crude oil prices since April. There are many other indexes of financial conditions, of course, but they mostly tell a similar story. Goldman Sachs's U.S. equivalent is back down to where it was late last year, just a tad from its three-year low. Despite trade uncertainty and high borrowing costs, the economy is stable and may be overly buoyant with above-target inflation. Consequently, the Fed's policy may be less restrictive than it seems.