As expected, today the Fed kept interest rates unchanged at 4.50%, after which Powell's press conference began, here’s what the Fed Chair said:
⚠️The Federal Reserve states that "the risks of rising unemployment and inflation have increased."
⚠️Powell began by stating that inflation has significantly decreased.
⚠️He said that if rates are not lowered, it could lead to rising inflation, slowing economic growth, and increased unemployment.
⚠️The US economy is resilient and performing well enough.
⚠️Jerome Powell stated that this year we will not meet the set goals if rates remain unchanged.
⚠️We will not know what the correct answer will be until we get more data - said Powell, hinting at CPI and unemployment.
⚠️Powell notes that the Fed does not publish forecasts regarding the probability of a recession.
⚠️Powell believes that, possibly, there will be no further progress in achieving the Fed's goals at least next year.
Market reaction:
The dollar is at a daily high while the S&P 500 is declining during today’s trading session.
Meanwhile, BTC reacted cautiously with a drop of 1.5%.
The probability of a rate cut in June has slightly decreased to 20% from approximately 25% ahead of the meeting.