The heavy news is here! Tonight is a very critical Federal Reserve meeting on interest rates for May, and the market believes the probability of a rate cut this time is only 3%!

Due to the non-farm employment data released last week, which exceeded expectations with 177,000 jobs added, the probability of a rate cut in June is now only 30%. The next rate cut is likely to come in July.

So what are the key points of this May meeting? Let's see whether the Federal Reserve will tell everyone what the prerequisites for a rate cut are.

In my view, it actually divides into three steps. The first step for the Federal Reserve is to see an economic slowdown, meaning that U.S. consumer data significantly slows down or the unemployment rate rises sharply. However, in the past month, neither of these two figures has shown a slowdown; not only did domestic demand grow by 3% in GDP, but the non-farm employment data also exceeded expectations.

So assuming the first step of a smooth economic cooling can be achieved. The second step is that the Federal Reserve also needs to see that inflation has not rebounded due to GS. If GS brings a rebound in inflation in June or July, the Federal Reserve must convince itself that this is a temporary inflation, and in the long run, inflation will not remain high. The so-called opening the refrigerator door and stuffing the elephant inside, both steps are indispensable.

And now we see that even the first step, which is economic slowdown, the Federal Reserve has not observed, let alone believe that inflation is temporary. Furthermore, in June, there is a high possibility of commodity price shortages in the U.S., so it will caution the market that the Federal Reserve will not take action in advance and will not provide any expected path for rate cuts.

Therefore, tonight is likely to be a hawkish statement, and everyone must pay attention to the risks. #美联储FOMC会议