According to Jin Ten Data, the Swedish Nordea Bank pointed out that the Federal Reserve waits for more clarity when risks rise. Trade policy and economic outlook are seen as uncertain, and the Federal Reserve hopes to see clearer results.
The market interprets this as slightly hawkish, reducing the likelihood of a rate cut at the June meeting. The Federal Reserve is expected to focus on supporting economic growth and ignore the temporary rise in inflation.
If long-term inflation expectations are controllable and consistent with targets, the Federal Reserve can ignore the temporary inflation shock caused by tariffs. The uncertainty of tariffs may have a short-term impact on the economy greater than expected, but currently, the impact is limited, and there are signs of progress in trade negotiations.