Breaking News! The Federal Reserve underwent a dramatic change overnight, with three shocking decisions overturning the financial landscape?
Last night, the Federal Reserve meeting created huge waves in finance! Three major decisions are closely related to your wealth, take a look quickly!
1. Sudden change in interest rate cut expectations, shattered bull market dreams?
With an unemployment rate of 6.5% and core PCE at 2.9%, the Federal Reserve's dot plot saw a massive shift. The number of votes supporting two interest rate cuts surged from 5 in March to 9, shattering the market's expectation of four rate cuts this year, clearly indicating only two rate cuts. This will redefine liquidity expectations, and asset prices in the stock market, bond market, and others may see adjustments.
2. Under the shadow of tariffs, will rate hikes be repeated?
When asked if Trump's new tariff policy would prompt the Federal Reserve to cut rates early, Powell cited data from 1988. During Reagan's era, when auto tariffs were at 30%, the Federal Reserve did not cut rates but instead raised them by 175 basis points, implying that this time it may also raise rates to combat inflation. Once rates are increased, corporate financing costs will soar, economic growth will slow down, and the stock market will also be impacted.
3. Powell remains steady at the 'fishing platform'
In response to rumors that Trump's team wants to replace him, Powell referred to the Federal Reserve Act. When reporters pressed him on whether he would resign, he displayed his 'My House' screensaver to declare his position. At least until June next year, he will continue to serve as Chair, ensuring policy stability.
