The Federal Reserve holds steady, Powell signals caution

In the early hours of June 19, the Federal Reserve announced that it would maintain the range at 4.25%-4.50%.

Powell emphasized at the press conference that the current policy stance is flexible, but more evidence of inflation retreat is needed for an interest rate cut.

He pointed out that there are signs of a rebound in commodity inflation recently, which may rise further in the summer, and the transmission effect of tariff policies on prices still carries uncertainty.

Although officials expect a cumulative rate cut of 50 basis points by the end of 2025, Powell reiterated that there is "no rush to act" and more data needs to be observed to confirm the trend.

Additionally, the Federal Reserve lowered its GDP growth forecast for this year to 1.4% and raised its core PCE inflation forecast to 3.1%, reflecting dual concerns about economic slowdown and inflation stickiness.

Powell admitted that while the labor market remains robust, the "low hiring, low firing" rigid state needs to be closely monitored.

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