🟢 Interest rates are held steady. The Fed believes the current policy is at an appropriate level to "patiently observe" more data.
🟢 Inflation is decreasing but still higher than the 2% target, especially in the services sector. The Fed warns that inflation risks remain evident.
🟢 Tariffs are the biggest uncertain factor: they can increase both inflation and unemployment. The Fed acknowledges that the current scale of tariffs is larger than expected and the full impact cannot yet be assessed.
🟢 Q1 GDP is distorted due to businesses importing goods before taxes, but the economy remains stable, growing at about 2.5%.
🟢 The labor market remains strong, although some businesses are beginning to delay investments and lay off workers locally – if prolonged, this will affect macro data.
🟢 The Fed does not commit to cutting interest rates in 2025. Any actions will depend on actual data regarding inflation, employment, and growth.
🟢 Chairman Powell emphasizes a patient stance, stating that the risks from "waiting to see" are currently quite low, and there is no pressure to act immediately.
🟢 The Fed will not rely on a single indicator (like unemployment) but will assess the overall labor market and economy before changing policies.
🟢 Compared to 2019, the current situation is very different: inflation has been high for 4 consecutive years, so interest rates cannot be lowered as early as before.
🟢 Powell asserts that the Fed is independent, not influenced by the opinions of President Trump or any political party. The Fed's decisions are based solely on data and the long-term interests of the economy.
🟢 In summary, nothing too surprising with Chairman Powell's statements; most of it is similar to what our peers predicted beforehand.
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"WAITING AND NEEDING MORE DATA" is the statement that Mr. Powell has been saying for 5 months, but the listeners do not know what he is waiting for and what he needs 😂
