At 2 a.m. Beijing time on May 8, the Fed's interest rate decision is highly anticipated. The market currently widely expects it to maintain the interest rate at 4.25% - 4.50%. According to data from the CME Group, the probability of keeping the interest rate unchanged is 97.2%, while the probability of a 25 basis point rate cut is only 2.8%. It is expected that there will be 3 rate cuts in 2025.
However, it is crucial to pay attention to the hints regarding future policy paths in Powell's speech. His statements on the state of the U.S. economy and the prospects for future rate cuts are the focal points. If he releases “hawkish” signals and emphasizes inflation risks, it will reduce the likelihood of rate cuts, potentially escalate conflicts with Trump, negatively impact global stock markets, and benefit safe-haven assets like the yen and gold; if he clearly hints at a rate cut path, it may boost financial markets.
