#美联储FOMC会议 The results of the Federal Reserve's June FOMC meeting are about to be revealed. After starting a rate cut cycle in December 2024, the Fed has kept rates unchanged at the **4.25%-4.50% range** for two consecutive meetings. The upcoming meeting on June 18-19 is becoming the most critical watershed for monetary policy in 2025.
1️⃣ Policy Background: A Stagnant Easing Cycle
Since the first rate cut in four years starting in September 2024, the Fed's monetary policy trajectory in 2025 shows a clear stagnation:
- Interest Rate Stalemate: After pausing rate cuts in March, the May meeting again kept rates unchanged, setting a record of three consecutive meetings without action.
- Balance sheet adjustment: Since April, the Fed has significantly reduced the pace of its Treasury bond purchases from $25 billion per month to $5 billion, while maintaining the MBS reduction cap at $35 billion. This 'technical adjustment' was clearly opposed by Governor Waller, highlighting internal policy differences.
- Forward guidance weakened: The latest policy statement removed the key phrase 'risks are roughly balanced,' replacing it with a warning of 'increased uncertainty.' This change in wording suggests that the Fed is in a policy fog, lacking confidence in its judgment of the economic outlook.
2️⃣ Economic Fundamentals: Divergence between Growth and Inflation
Growth engine slowing
The March meeting significantly lowered the GDP growth forecast for 2025—from 2.1% in December last year to 1.7%, while the unemployment rate expectation was revised up from 4.3% to 4.4%. Although Powell insists that the 'hard data' of the economy, such as employment and consumption, still show resilience, he also rarely admits that the probability of economic recession 'has increased' (though he believes 'it is still not high'). Behind this cautious optimism is the **gradually evident suppressive effect of policy uncertainty on business investment**.
Inflation stickiness exceeds expectations
Although inflation has retreated from peak levels, the core contradictions remain prominent:
- Core PCE inflation forecast revised up from 2.5% to 2.8%, significantly deviating from the 2% target.
- The tariff policy of the Trump administration is pushing up short-term inflation expectations, and Powell admitted that 'it is difficult to determine the specific impact.'
- The minutes from the May meeting show that some officials are concerned that tariffs may lead to '**persistent inflation overshooting**,' weakening the transmission of monetary policy.
3️⃣ Points of Policy Divergence: The Three Key Focuses of Dovish-Hawkish Game
1. Tug-of-war over the timing of rate cuts
The dot plot shows **significant divergence among the 19 officials regarding the rate cut path for 2025**: 4 expect no cuts, 4 predict one cut, 9 support two cuts (50BP), and 2 advocate for three cuts. This dispersed distribution makes the economic forecast summary (SEP) of the June meeting particularly critical.
2. Data Dependency Dilemma
Powell emphasizes 'no rush to cut rates,' and policy adjustments need to wait for 'clearer market signals.' But the contradiction lies in that the impacts of tariffs and other policy shocks take months to reflect in the data, while the labor market is already showing early signs of fatigue—although the November non-farm payrolls exceeded expectations, the unemployment rate unexpectedly rose.
3. New Considerations for Financial Stability
The Federal Reserve is facing a rare policy challenge since the 1970s: it must avoid repeating the mistake of 'curbing inflation through recession' while also paying attention to fluctuations in asset prices such as the stock market. Slowing down the balance sheet reduction can be seen as a compromise—by reducing the supply of government bonds to suppress long-term yields and alleviate the tightening pressure on financial conditions.
4️⃣ Market Expectations and Potential Shocks
Current futures market pricing shows that traders' expectations for a rate cut in June have risen to nearly 75%, far exceeding the Fed's official guidance. This expectation gap itself has become a source of risk:
- Dovish scenario: If a surprise cut of 25BP occurs, the dollar index may fall below the 98 support level, and gold could surge to new highs of $3400-$3450.
- Hawkish scenario: Maintaining rates but signaling a rate cut in September, the dollar could test resistance around 100-100.5, and the U.S. Treasury yield curve could steepen again.
- Neutral scenario: The most likely path is to keep rates unchanged but lower the dot plot expectations, conveying a 'wait-and-see' stance through Powell's press conference, with gold oscillating around $3300.
5️⃣ Variables in Global Policy Coordination
June coincides with a concentrated schedule of global central bank meetings:
- The Bank of Japan may adjust its yield curve control (YCC) at the meeting on June 16-17.
- The Bank of England and the Swiss National Bank will announce their decisions simultaneously on June 19.
- Central banks in emerging markets are generally in a wait-and-see mode, waiting for the Fed to provide a clear anchor.
This overlapping timeline could amplify exchange rate volatility, especially if major central banks exhibit **policy divergence**—for example, if the Bank of Japan maintains easing while the Fed pauses rate cuts, the yen may further depreciate to the 142-140 range.
6️⃣ Outlook: A Choice at the Crossroads
The June meeting is essentially the Fed's response to threefold uncertainty:
1. Inflation Path Reconstruction: Can the tariff shock be categorized as a 'one-time factor' and ignored? Will long-term inflation expectations become unanchored?
2. Political Cycle Interference: The sensitivity of policies increases in an election year, and monetary policy may be pressured to pivot due to trade policies.
3. Effectiveness of Policy Tools: With interest rates still below 3% of the long-term neutral estimate, has the conventional easing space narrowed, and can QT adjustments replace rate cuts?
Scenario Simulation:
- Baseline scenario (50% probability): Maintaining rates, while the dot plot retains guidance for two rate cuts within the year, Powell emphasizes 'flexible responses.' The dollar moderately retreats, and risk assets rebound.
- Easing scenario (30% probability): A preemptive rate cut of 25BP and a downward revision of GDP expectations, signaling a clear dovish shift. Growth stocks lead the way, and U.S. Treasury yields decline.
- Tightening scenario (20% probability): Keeping rates unchanged and adjusting the dot plot to one rate cut, warning of inflation resilience. The dollar surges above 100, with gold dipping to $3200.
> Historical Insights: The current economic forecasts have subtle similarities to September 2007—slowing growth coupled with stubborn inflation. However, the difference is that the Fed now possesses more robust 'expectation management' tools, and **policy shifts are more likely to be achieved through forward guidance rather than aggressive rate cuts**.
As the meeting date approaches, the Fed is walking a tightrope between **economic cooling and stubborn inflation**. Any slight tilt in the decision-making balance will trigger a chain reaction in global capital markets. When Powell raises the microphone again, he is not only announcing the rate decision but also writing the prologue to the monetary policy paradigm for the post-tariff era.
