$BTC $ETH The recent market closely monitors the Federal Reserve's interest rate meeting on May 6-7. Despite Trump and investors hoping for a rate cut, it is highly likely that the Federal Reserve will hold its position. Recently, Trump called out on social media, "No inflation means we should cut rates," hoping to stimulate the economy and boost the stock market through low interest rates. However, Powell's stance is clear; he has already lowered the expectation for a rate cut in 2025 last December, and the current interest rate level of 425-450 basis points is considered appropriate.
The Federal Reserve's caution stems from multiple considerations: new tariff policies may push up inflation, and Republican tax cuts and other stimulus measures have been sufficient to support the economy, with the effectiveness of these policies still to be observed. The market is extremely sensitive to interest rate policies; previously, Powell's remarks about tariffs triggered a single-day drop of 6% in the S&P index, and Trump's threat to fire Powell also caused market turbulence.
Currently, CME data shows a 99.5% probability of maintaining interest rates in May, and market focus has shifted to June. Unless inflation significantly falls back or the economy deteriorates sharply, it is difficult for the Federal Reserve to ease up on rate cuts. Investors need to remain patient and be wary of market fluctuations caused by policy swings.
