Two major factors hinder the Federal Reserve from initiating interest rate cuts, and final decisions often lag behind economic conditions.

On May 7, when the Federal Reserve was caught in a dilemma due to conflicting macroeconomic data, its final decisions often lagged behind the situation. Trump is increasingly urging the Federal Reserve to lower interest rates, but the Federal Reserve is in a difficult position. Analysts say that there is almost no chance of an interest rate cut as the Federal Reserve starts its May policy meeting this week, and the likelihood of a rate cut in subsequent meetings is also very low. There are two reasons why Federal Reserve officials are constrained in monetary policy. The first reason is that rising inflation expectations make it difficult for the Federal Reserve to initiate interest rate cuts. The latest consumer inflation report shows that inflation rose 2.4% year-on-year in March, above the Federal Reserve's 2% target. Compared to potential future situations, this figure is still quite low: the one-year inflation expectation compiled by the University of Michigan is 6.5%. Trump's tariff policy is expected to increase consumer costs, which is the main driver of the significant rise in inflation expectations. Concerns triggered by the trade war have intensified the risk of stagflation, raising the possibility that the U.S. economy could fall into a situation of stagnation with rising prices. In this context, the Federal Reserve is actually caught in a dilemma, as it cannot address both issues simultaneously. The second reason is that macro data has not yet indicated the necessity for interest rate cuts. Currently encouraging data masks the issue of inflation expectations, macroeconomic data remains robust, and in some respects even shows relative strength. Last Friday's unexpectedly positive April non-farm payroll report boosted investor confidence and drove the stock market higher. In other words, the market is not pricing in an imminent recession. "The forward P/E ratio of the S&P 500 (SPX) is currently 21 times, with expected earnings per share (EPS) growth of 10% this year and 14% next year. This does not reflect obvious concerns about a recession." #美联储FOMC会议