Analysis of the Trend of the Federal Reserve

Latest market news, released by the Federal Reserve in the early morning6The minutes of the monthly meeting show that officials have divergent views on interest rate cuts, roughly divided into three factions. One believes that interest rate cuts will be made within the year but excludes them7Month (mainstream camp), two is to remain inactive throughout the year, and three is to advocate immediate action at the next meeting. Only a "few" officials support a rate cut this month, despite Trump's demand for an immediate and significant rate cut. However, there is limited support within the Federal Reserve for short-term rate cuts, and some officials even believe that there is no need for a rate cut this year.

The meeting minutes show that some attendees believe that the risk of rising inflation is still more prominent than the risk of employment, or the magnitude of risk reduction is relatively small. Some participants believe that risks in the labor market have become a major issue. They pointed out that there have been some signs of weakening in actual economic activity or the labor market recently, and the economic situation may weaken in the future. Although the uncertainty of inflation and economic prospects has decreased, caution should still be exercised when adjusting monetary policy. If high inflation persists and employment prospects weaken, the committee may face difficult trade-offs.

The latest post from the Federal Reserve Messenger stated that a debate is brewing within the Fed on how to respond to the risks posed by Trump's tariffs, which may end a period of relative unity. Officials may have disagreements on whether new cost increases are a reason to keep interest rates high. Due to Trump4The unexpected increase in tariffs announced in the month has raised concerns about the stagflation situation of weakened economic growth and rising prices, disrupting the Federal Reserve's plan to resume interest rate cuts this year.

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