The Fed kept the interest rate at 4.5%

forecast: 4.5%

previous: 4.5%

▶️Key points from Jay Powell's speech:

▪️The economy in the U.S. is strong.

▪️The Fed will slow down the pace of balance sheet reduction.

▪️Economic uncertainty has increased.

▪️Inflation expectations have risen slightly due to tariffs, long-term expectations also remain aimed at 2%.

▪️There is no rush to make a decision on the Fed's rate; we are ready to wait for greater clarity.

▪️The new U.S. administration is implementing changes in policy. If the economy remains strong, we may be able to maintain restraint in policy for a longer period.

▪️We may soften the Fed's monetary policy if the labor market weakens.

▪️Inflation is rising due to changes in trade policy.

▪️Fed chairpersons issued forecasts similar to the last time.

▪️If the Fed's dual mandate goals need to be balanced, it is a challenging task, but the situation is different now.

▪️Analysts have raised the likelihood of a recession in the U.S., but it remains low.

▪️Now is the right time to slow down the pace of balance sheet reduction. We are still far from the level needed to stop the Fed's balance sheet reduction.

▪️I see no reason to believe that we are witnessing a repeat of the 1970s.