Summary of Key Points from the Federal Reserve FOMC Statement and Powell’s Press Conference

According to Jinse Finance, here is a summary of the key points from the Federal Reserve FOMC statement and Powell’s press conference: FOMC Statement: 1. Statement Overview: The benchmark interest rate remains unchanged at 4.25%-4.50% for the fifth consecutive time, in line with market expectations. 2. Voting Split: Governors Waller and Bowman advocated for a rate cut, marking the first time in over 30 years that two governors have cast dissenting votes. 3. Inflation Outlook: No changes were made to the inflation language, stating that inflation remains somewhat elevated. 4. Economic Outlook: Economic growth slowed in the first half of the year, and uncertainty about the outlook remains high. Powell’s Press Conference: 1. Interest Rate Outlook: The current policy stance is well-positioned; no decisions have been made regarding the September meeting; decisions cannot be based on the June dot plot six weeks from now and must rely on data. 2. Inflation Outlook: The core PCE for June is expected to rise 2.7% year-on-year, with overall PCE up 2.5% year-on-year; most long-term inflation expectation indicators are consistent with the Fed’s target; inflation is further from our target than employment; inflation data is expected to be more affected by tariffs. 3. Economic Outlook: The economy is on solid footing, with indicators showing a slowdown in growth; the “Big and Beautiful” Act is not seen as particularly stimulating for the economy. 4. Employment Outlook: The labor market remains balanced, but downside risks are clearly present. 5. Tariff Impact: Most estimates of the effective tariff rate have changed little; it is reasonable to assume the impact of tariffs on inflation is temporary; 30% or 40% of core inflation comes from tariffs; it is too early to assess the impact of tariffs now. 6. Explaining Dissent: Dissenters are expected to explain their views in the next day or two; two members believe it is time to cut rates, and such differences are not surprising. 7. Market Reaction: There was little market volatility after the statement; during Powell’s remarks, gold’s daily loss widened to $50, the dollar rose; U.S. Treasury yields rebounded, with the 10-year yield peaking at 4.38% and the 2-year yield approaching 4%; U.S. stocks came under pressure and fell, and Bitcoin briefly dropped below $116,000 per coin. 8. Other Matters: Before the decision was announced, Trump said the Fed would not cut rates this time and predicted a rate cut in September. 9. Latest Expectations: Market bets on a rate cut have cooled; as of press time, the probability of a rate cut in September is 49.6%, down from about 60% before the rate decision; the full-year rate cut is priced at 36 basis points, compared to 44 basis points before the decision.