#美联储3月利率决议 Made a summary for everyone

Summary of the Federal Reserve's March monetary policy meeting

Core decisions and adjustments:

Interest rate guidance:

No rate cut for now: Maintain the forecast of no change in the March 2024 rate and two rate cuts in 2025, consistent with last December's predictions;

Market expectations for a rate cut in June have risen.

Adjustment of balance sheet reduction pace:

Quantitative tightening (QT) scale reduction: Starting in April, monthly balance sheet reduction will decrease from $25 billion to $5 billion (substantial liquidity injection).

Economic forecast revisions:

2024 GDP growth rate: 2.1% → 1.7% (economic growth pressure highlighted);

2024 core PCE inflation: 2.5% → 2.8% (acknowledgment of persistent inflation);

2024 unemployment rate: 4.3% → 4.4% (signals of a cooling labor market).

Interpretation of policy logic:

The Federal Reserve cautiously weighs between curbing inflation and preventing economic downturn. Slowing the balance sheet reduction can be seen as implicit easing, which may exacerbate inflation risks in the long term. The market may interpret this as a tone of 'higher rates lasting longer,' but there remains tentative expectation for a rate cut by the end of 2024.

Future focus:

Attention shifts to the June FOMC meeting, where caution is needed regarding the risk of 'rising unemployment + persistent inflation' coexisting, which may force a revision of the policy path.