United States: FOMC Assessment
2025-01-31
■ The wording on inflation in the statement was modified, but Fed Chairman Powell said that this has no special meaning
■ To observe the impact of the Trump administration's policies, the FOMC continues to maintain a wait-and-see attitude
The Federal Reserve (FRB) held a Federal Open Market Committee (FOMC) meeting from the 28th to the 29th and decided to maintain the target range of the federal funds rate (FF rate) at 4.25%-4.50%. The four regional Fed presidents who newly obtained voting rights this year also unanimously agreed to this decision.
In the statement, the FOMC adjusted its perception of the labor market from "slowing down" to "still solid". At the same time, the statement on inflation still maintains that "inflation remains high", but the relevant wording of "making progress towards the 2% inflation target" has been deleted. However, the FOMC still maintains the judgment that the risks of employment and inflation targets are "basically balanced", and reiterates that it will continue to carefully evaluate the latest data, economic prospects, and risk balance when evaluating the magnitude and timing of adjusting the FF interest rate target range. Therefore, the statement has not been changed except for the economic assessment part.
Fed Chairman Powell said at a press conference that the inflation statement deletion was just a reorganization of the wording and did not convey any special information. In addition, he reiterated that the current interest rate level is still tight and did not change the basic judgment of the policy stance. Regarding future interest rate cuts, Powell emphasized the need to confirm the progress of inflation slowdown first and was not in a hurry to adjust monetary policy, but also expressed expectations for further declines in inflation, suggesting that interest rates may be cut in the future.
This FOMC meeting shows that the Fed is still observing the impact of the Trump administration's policies on the economy and prices and continues to maintain a wait-and-see attitude. The market interpreted that the meeting did not bring new information, so the financial market did not fluctuate significantly before and after the meeting. According to market expectations calculated by the "FedWatch Tool" (FedWatch) through US interest rate futures, the market expects two interest rate cuts (June and December) of 0.25% each this year, which is consistent with the policy interest rate expectations announced at the FOMC meeting in December last year. After the meeting ended smoothly, investors' attention is expected to turn to economic data and the financial reports of major US companies.
■ To observe the impact of the Trump administration's policies, the FOMC continues to maintain a wait-and-see attitude
The Federal Reserve (FRB) held a Federal Open Market Committee (FOMC) meeting from the 28th to the 29th and decided to maintain the target range of the federal funds rate (FF rate) at 4.25%-4.50%. The four regional Fed presidents who newly obtained voting rights this year also unanimously agreed to this decision.
In the statement, the FOMC adjusted its perception of the labor market from "slowing down" to "still solid". At the same time, the statement on inflation still maintains that "inflation remains high", but the relevant wording of "making progress towards the 2% inflation target" has been deleted. However, the FOMC still maintains the judgment that the risks of employment and inflation targets are "basically balanced", and reiterates that it will continue to carefully evaluate the latest data, economic prospects, and risk balance when evaluating the magnitude and timing of adjusting the FF interest rate target range. Therefore, the statement has not been changed except for the economic assessment part.
Fed Chairman Powell said at a press conference that the inflation statement deletion was just a reorganization of the wording and did not convey any special information. In addition, he reiterated that the current interest rate level is still tight and did not change the basic judgment of the policy stance. Regarding future interest rate cuts, Powell emphasized the need to confirm the progress of inflation slowdown first and was not in a hurry to adjust monetary policy, but also expressed expectations for further declines in inflation, suggesting that interest rates may be cut in the future.
This FOMC meeting shows that the Fed is still observing the impact of the Trump administration's policies on the economy and prices and continues to maintain a wait-and-see attitude. The market interpreted that the meeting did not bring new information, so the financial market did not fluctuate significantly before and after the meeting. According to market expectations calculated by the "FedWatch Tool" (FedWatch) through US interest rate futures, the market expects two interest rate cuts (June and December) of 0.25% each this year, which is consistent with the policy interest rate expectations announced at the FOMC meeting in December last year. After the meeting ended smoothly, investors' attention is expected to turn to economic data and the financial reports of major US companies.