Federal Reserve FOMC and Powell Press Conference Highlights

FOMC Statement:

1. Interest rates unchanged: 12-0 unanimous decision to maintain the benchmark interest rate at 4.25%-4.50%, marking the third consecutive time with no change.

2. Strong employment: Unemployment rate stable, labor market remains resilient.

3. Balance sheet reduction continues: Continuing to reduce treasury and MBS holdings at the current pace.

4. Inflation still elevated: Inflation pressures persist, with rising risks of high unemployment and inflation.

5. Economic uncertainty intensifies: Despite fluctuations in net exports, the overall economy continues to expand robustly.

Powell Press Conference:

1. Interest rate policy: Current uncertainty is high, no immediate rush to adjust rates; whether to cut rates this year depends on circumstances.

2. Inflation expectations: Short-term inflation expectations rising, long-term expectations remain stable; significant tariff increases will raise inflation.

3. Economic situation: No signs of slowdown yet, but uncertainty and downside risks are increasing.

4. Employment situation: Wage growth slowing, employment close to maximum, must balance dual objectives.

5. Tariff impact: Tariff impacts exceed expectations, but no significant economic shock observed yet, still likely to push up inflation.

6. Market reaction: Gold rose then fell, the dollar strengthened, 2Y US Treasury bonds fell about 2 basis points, US stocks fluctuated downward.

7. Rate cut expectations: Probability of a rate cut in June decreased to 23.8%, with an expected total cut of about 78 basis points for the year.

8. Other responses: Refused to comment on Trump’s remarks, did not disclose plans after leaving office.