List of Key Points from the Federal Reserve's FOMC Statement and Powell's Press Conference

Golden Finance Report, Key Points of the Federal Reserve FOMC Statement and Powell's Press Conference: FOMC statement: 1. Statement Overview: By a vote of 11-1, the benchmark interest rate was kept unchanged at 4.25% -4.50%. Director Waller cast a dissenting vote, leaning towards continuing to shrink the balance sheet at the current pace. The statement no longer refers to the risk as "roughly balanced" and mentions that the uncertainty of the economic outlook has increased. 2. Interest rate outlook: The dot matrix chart maintains the median of the past three years unchanged, and there will be two interest rate cuts in the next two years. However, the number of officials who support not cutting interest rates or cutting interest rates even less will increase in 2025. 3. Inflation outlook: The PCE inflation expectations for the next two years and this year's core PCE inflation expectations have been raised, and it is still expected that inflation will reach the target in 2027. Most officials expect an upward risk trend. 4. Economic outlook: The overall GDP growth rate forecast for 2025-2027 has been lowered, and this year's forecast has been significantly reduced from 2.1% to 1.7%. The unemployment rate for this year has been slightly raised to 4.4%, while the remaining years remain unchanged. 5. Statement shrinking policy: the pace of balance sheet shrinking will be slowed down in April. The scale of treasury bond will be reduced from $25 billion to $5 billion, and the scale of MBS will be maintained at $35 billion. Powell's press conference: 1. Interest rate outlook: The Federal Reserve does not need to rush to adjust its policy stance, but needs to wait and see based on data. Relaxing or maintaining restrictive positions as needed. We are at a stage where we can cut interest rates or maintain the current obvious tightening policy stance. 2. Inflation outlook: Inflation remains slightly high. Further progress on inflation this year may be delayed. The baseline forecast is that inflation will be temporary. 3. Economic outlook: The US economy is strong, and surveys show increasing economic uncertainty. Recent signs indicate a slowdown in consumer spending. We will closely monitor signs of weakness in hard data. Predictors have to some extent increased the likelihood of an economic recession, but it is still not high. 4. Employment prospects: The labor market is stable and the overall labor market remains balanced. The recruitment and layoff rates are both low, and a significant increase in layoffs may quickly translate into unemployment. Layoffs are important for relevant personnel, but not significant at the national level. 5. Scale reduction situation: Slowing down the scale reduction is a technical adjustment. Slowing down means slower speed but longer duration. There are currently no plans to slow down the reduction rate of MBS holdings, and there is a tendency to exclude MBS from the table. 6. Tariff impact: The impact of tariffs is uncertain, and attention should be paid to the net impact of policies. Short term inflation expectations are on the rise. If the recent commodity inflation data continues to be strong, it is definitely related to tariffs. The staff simulated and predicted that the United States would be subject to comprehensive tariff retaliation. 7. Market reaction: The overall US Composite Index fell by more than 40 points, the US Treasury 2Y fell by about 10BP, gold rose and reached a new high of $2050, Bitcoin rose above $85000, the US stock market rose sharply, and the Nasdaq rose more than 2% at one point. 8. Latest expectation: According to interest rate futures, traders believe that the probability of the Federal Reserve resuming interest rate cuts at the June meeting has risen to 64%, and the cumulative rate cut for the whole year has risen to 65 basis points, an increase of about 10BP from before the decision.