Federal Reserve, Major Changes!
The three major officials of the Federal Reserve maintain a "wait-and-see" attitude towards interest rate cuts.
New York Fed's Williams said the economy is still unclear, and a rate cut may not happen before September. Atlanta Fed's Bostic is more conservative, believing there can be at most one cut this year. Another official, Jefferson, also stated that they need to observe whether inflation can stabilize first. In summary, their main point is that the economy currently faces both the possibility of inflation rebounding and the risk of recession, so interest rates cannot be adjusted casually; they need to wait and see.
The market originally expected two rate cuts this year, but the probability is decreasing. According to futures market data, the likelihood of a rate cut in June is less than 10%, and in July, it’s only one-third.
However, U.S. stocks seem to have digested this news. Although Moody's downgraded the U.S. sovereign credit and ratings of major banks like JPMorgan, the three major U.S. stock indices still experienced slight gains on Monday.
Currently, this market is indeed very conflicted; it is very difficult to short against the trend, and being bold to go long also carries risks, so it’s better to stay flat. As long as one is not fully invested, it is the most comfortable position.