At 2 AM today, the Federal Reserve announced it will keep interest rates unchanged at 4.25%-4.50% in May, in line with market expectations, marking the third consecutive meeting of inaction. Federal Reserve Chair Powell stated that the economy is in a robust state, and inflation has significantly decreased. The current inflation rate is slightly above the target level of 2%, and the labor market has reached or is nearing maximum employment levels.
Abnormal fluctuations in trade have complicated GDP measurements. However, the current policy stance enables the Federal Reserve to respond in a timely manner. The outlook for monetary policy may include interest rate cuts or maintaining rates, depending on economic conditions. The fluctuations in GDP data will not fundamentally alter our situation.
After the interest rate decision was announced, according to CME "FedWatch" data, the probability of the Federal Reserve maintaining rates in June is 80.2%. Based on futures prices, the likelihood of a rate cut by July is about 75%.