- The Federal Reserve says the banking system is ‘sound and resilient’.
- The rate of decrease of the balance sheet is unchanged.
- It’s possible to freeze the interest rate in June
- There was no promise to raise rates.
FED policies pivot?
In a March statement, the Fed suggested there would be no rate cuts until 2024. However, the market began betting on a rate cut in September, and after today’s announcement, the chances of a rate cut this year increased.
In the statement, it was mentioned that the committee will closely monitor the received information on inflation and economic conditions. and will assess its implications for monetary policy. This, in my view, is a lack of commitment to raise interest rates in June.
America’s heart is still in a weak position. Do not enter into a trade in the direction of the rising dollar.
When asked what they’ll be looking at between now and June, Powell says a particular focus now and going forward is what’s happening with the credit crunch.
We need to consider the credit limit to see if our policy stance is restrictive enough.
The committee is of the view that inflation is not coming down that fast, it will take some time, and if it is true, it is not appropriate to cut rates.
Services not related to housing inflation have not changed significantly.
The flow of large bank deposits has indeed stabilized.
The Fed cannot protect the economy and the financial system from the damage that debt defaults cause.
Big 3 banks were at the center of stress in early March, now everything is settled.
Today, there was a lot of support for raising interest rates.
We feel close, or maybe even where we want to be.
There is a sense that we are nearing the end rather than the beginning.
We can look at the data and make an accurate assessment.
The probability that rates will remain unchanged at the next meeting has increased from around 72% before the speech to over 85% now.