According to Jin10 data, Sweden's Nordea Bank points 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 overlook the temporary rise in inflation.
If long-term inflation expectations are controllable and aligned with the target, the Federal Reserve can overlook the temporary inflation shocks caused by tariffs. Tariff uncertainty may have a short-term impact on the economy greater than expected, but the current impact is limited, and there are signs of progress in trade negotiations.
