The latest results from the Federal Reserve's monetary policy meeting have been released, with the decision-making body choosing to maintain the interest rate in the range of 4.25%-4.5% for the third consecutive time, in line with market expectations, but the overall tone is biased towards hawkish.

The dot plot shows a clear tightening of the future rate cut path, with the expectation of rate cuts in 2025 reduced from two times (a total of 50 basis points) to just once (25 basis points). More noteworthy is that out of the 19 members, 11 believe there will be at most one rate cut this year, while another 8 members even think there will be no rate cuts at all this year.

At the same time, the Federal Reserve has lowered its GDP growth forecast from 1.7% to 1.4%, but inflation expectations have risen—core PCE expectations have increased from 2.8% to 3.1%, indicating that the economy is facing heightened challenges of stagflation risk. The market reacted quickly to this, with the dollar index briefly rising by 0.8%, and Bitcoin's price subsequently falling below $61,000.

In the subsequent press conference, the Federal Reserve chairman's tone was hawkish but revealed several key pieces of information: first, he stated that although current policies have imposed certain restrictions on the economy, the inflation level remains high, suggesting there will be no rush to cut rates in the short term; second, he specifically mentioned the potential inflation pressure from tariff policies, believing that once corporate inventories are digested, inflation may face a second upward risk; third, he pointed out that the labor market remains relatively strong, with the unemployment rate holding at 4.2% and employment data performing better than expected, which undermines the necessity for rate cuts.

For the financial markets, the results of this meeting imply that the previously anticipated improvement in liquidity may be delayed, but this is merely a short-term adjustment rather than a long-term trend shift. Investors need to reassess their expectations for the interest rate path and adjust their investment strategies accordingly.

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