What will Powell say at the Federal Reserve meeting tonight?

It is basically a done deal that there will be no rate cut in May, and everyone is more concerned about whether there will be a rate cut in June and July. The probability of no rate cut in June has risen to 69.8%, and for July, the probability of a 25 basis point cut has reached about 57%. Therefore, the market is likely betting on a rate cut in July.

The delay in rate cuts is still due to the recent GDP and non-farm data, which indeed do not necessitate an immediate rate cut. However, the market has already digested the fact that there won't be a rate cut, so it's not considered a bearish signal. What is truly tense is what Powell will say.

Goldman Sachs Chairman Kaplan, also a former Federal Reserve official, recently stated that Powell said in 2022 that to bring inflation down to 2%, we might have to accept an economic recession!

Currently, the U.S. economy is not in recession, although the U.S. government has started to tighten its budget, which may increase economic risks. However, no recession means no recession; the Federal Reserve speaks based on data, and unless the economy clearly shows signs of decline, it will not easily cut rates. He believes that there might only be two rate cuts by 2025, and the Federal Reserve will wait for risks to manifest before intervening, rather than acting in advance.

Considering all of the above, Powell is likely to remain hawkish, emphasizing that there is no rush to cut rates and will maintain a wait-and-see approach.