The Federal Reserve's May interest rate meeting ended. This meeting conveyed three important messages, which made people worry about the global economic outlook.
1
The Federal Reserve made it clear that it would not raise interest rates again, which is undoubtedly good news for the US financial market, which has been under pressure from high interest rates. However, this also means that the Federal Reserve has realized the negative impact of interest rate hikes on the economy and has to make compromises.
2
The Federal Reserve announced that it would reduce the scale of selling treasury bonds from June, from $60 billion to $25 billion. This move is aimed at easing tensions in the global market and avoiding a market crash caused by a large-scale sale of treasury bonds. However, this also exposed the helplessness and dilemma of the Federal Reserve in dealing with the global financial crisis.
3
The Federal Reserve also warned not to try to predict when they would cut interest rates because they themselves did not know. This statement is even more disturbing because the Federal Reserve, as one of the important central banks in the global economy, cannot be ignored in its policy changes on the global financial market. The Federal Reserve seems to be betting that it can harvest enough global assets before the US financial industry is destroyed by high interest rates.
These three important messages from the Federal Reserve have undoubtedly brought more uncertainty to the global economy. We expect the Federal Reserve to stabilize the market as soon as possible and maintain the stable development of the global economy.
