Although there will be no interest rate cuts tonight, the importance of the mid-year Federal Reserve meeting in the early hours of tonight is comparable to any interest rate cut meeting. This is because Chairman Powell's speech will outline the interest rate cut path for the Federal Reserve in the second half of this year. Additionally, there will be the Fed's dot plot, which means that the voting members will provide a specific interest rate cut roadmap for the second half of this year. There are three main highlights of tonight's meeting.

The first highlight is the dot plot. In March of this year, the Fed's voting members adjusted their expectations for interest rate cuts in 2025 from three cuts, as predicted last December, to two cuts. The main reason for this adjustment is the rebound in inflation in the U.S. this year, as well as the rising trend of tariffs in the U.S.

Now, there is great concern in the market about whether the forecast will be further adjusted from two cuts to one cut. If such an adjustment does occur, the market will face a huge blow, and the possibility is indeed not small. If just two out of the nine voting members raise their interest rate cut expectations, it is possible that this year we could see a change from two cuts to one cut.

The second highlight is the Fed's economic forecast regarding the likely downward adjustment of U.S. economic growth. This year's growth is likely to be revised down from the initial forecast of 1.7% to 1.4%, but the good news is that the forecast for economic growth in 2026 is likely to be revised up to 1.8%. This is due to the fact that starting in the fourth quarter of this year, a series of economic stimulus policies, such as tax cuts in the U.S., are about to be implemented, which will have a substantial positive impact on the U.S. economy in 2026. This is also why it is believed that the U.S. stock market in the second half of this year will experience a reversal compared to the first half of this year.