Attention brothers⚠️ Tonight, the Federal Reserve will announce the latest interest rate decision.
The market generally expects that this meeting will maintain interest rates unchanged.
Latest data shows that the U.S. inflation rate has dropped to 2.8% (expected 3.1%).
Moreover, the Truflation real-time inflation indicator has further dropped to 1.7%.
These data may prompt the Federal Reserve to lower interest rate expectations in the dot plot for 2025.
- The purple line represents the (Federal Reserve members' predicted) interest rate expectation path.
- The red line represents the (interest rate trend path if a recession occurs).
In the current situation, it is indeed a difficult choice.
Given the current weak market sentiment, Powell's response could trigger a sell-off if not careful. The best approach may still be: the economy is doing well now, and if the situation changes, we will act early to raise or lower rates. Soothing the present while guaranteeing the future support is killing two birds with one stone.