The interest rate hike in May is a foregone conclusion, where will future policies go❓❓
At the FOMC meeting, Chairman Powell once again demonstrated his superb communication skills. The Fed raised interest rates by 25 basis points (5.25%) as expected, and with the "hawkish pause on interest rate hikes" stance, it removed all forward guidance.
The Fed made it clear that future policy direction will mainly depend on three factors: inflation, job market conditions and credit supply.
1. The Fed "remains highly concerned about inflation risks"
2. “It may be really different this time… There really is too much excess demand in the job market.”
3. A key question in the coming weeks will be whether credit will tighten, including for small and medium-sized banks.
The response from macro assets such as stocks and bonds was very muted this time compared to previous meetings, with the SPX down only about 0.5% and the 2-year U.S. Treasury yield down 6 basis points as of 3:30 p.m. ET.
At the FOMC meeting, Chairman Powell once again demonstrated his superb communication skills. The Fed raised interest rates by 25 basis points (5.25%) as expected, and with the "hawkish pause on interest rate hikes" stance, it removed all forward guidance.
The Fed made it clear that future policy direction will mainly depend on three factors: inflation, job market conditions and credit supply.
1. The Fed "remains highly concerned about inflation risks"
2. “It may be really different this time… There really is too much excess demand in the job market.”
3. A key question in the coming weeks will be whether credit will tighten, including for small and medium-sized banks.
The response from macro assets such as stocks and bonds was very muted this time compared to previous meetings, with the SPX down only about 0.5% and the 2-year U.S. Treasury yield down 6 basis points as of 3:30 p.m. ET.