analysis of the political stance of the Federal Reserve System and ways to lower interest rates ahead of Powell's speech on May 8

The head of the Federal Reserve System, Jerome Powell, will make a statement on monetary policy and hold a press conference at 2:30 AM Beijing time on May 8. This meeting is the third meeting of the Fed in 2025, and the market generally expects the Fed to keep interest rates unchanged, but Powell's remarks will provide key guidance on the political course for the second half of the year. Here are the main forecasts and analysis:
1. Political position: refrain from actions, emphasize dependence on data
The current "hard data" of the U.S. economy is strong, with a March core PCE inflation rate of 2.6% year-on-year and an addition of 177,000 non-farm jobs in April, while the unemployment rate remains steady at 3.8%. Despite the Trump Administration's pressure to cut interest rates, the Federal Reserve is expected to "stay put" and reaffirm its position of "not being in a hurry to adjust the interest rate," emphasizing the need to observe the impact of tariff strategies on inflation and the economy. The meeting statement may slightly adjust the economic description, changing "economic activity is expanding steadily" to "slowing down" to reflect the current situation of QatGDP contraction.
Two, focus of the speech: Double challenge of inflation and customs.
Paul will focus on answering two main questions:
1. Inflation resistance: despite the decreased pressure on commodity prices, the lag in housing inflation is significant, and more time is needed to reflect improvements in the data. Powell may reiterate the goal of "ensuring that a one-time price increase does not turn into prolonged inflation."
2. Impact of tariffs: Trump's trade policy may lead to increased import costs and disruptions in supply chains, the Fed must assess its long-term impact on inflation expectations and economic growth. Wells Fargo notes that in the current uncertainty, the Fed must find a balance between "curbing inflation" and "preventing recession."
Third, the time for interest rate cuts: the earliest may begin in July, but the threshold has been raised.
The market cut interest rates by 25个 Ji for the first time in July, and then lowered interest rates by 1-2 times by the end of the year. 但高盛等机构认为,美联储对降息设置了更高门槛,需看到就业市场显有疲软或通胀持续降温的明确证据。 花旗预测全年降息125个基点,但时点取决于劳动力市场数据。
Four, the dispute over independence: responding to Trump's pressure
Trump recently criticized Powell for "stubbornness," but Powell is likely to reaffirm the independence of the Federal Reserve, avoiding politicization of statements while emphasizing that policy adjustments are based solely on economic data.
Conclusion
The main signal of this meeting is "the wait continues, the decrease in interest rates has not yet occurred". If economic data remains resilient, a decrease in interest rates in July may be further delayed; if the impact of tariffs leads to a slowdown in growth or inflation falls below expectations, then a window for easing may open in the second half of the year. Investors should pay attention to Powell's remarks on "the sufficiency of policy constraints," as this may contain the risk of rate hikes in the future. #BTC重返97k #Bitwise NEAR ETF 申请 #OBOL 上线福利 #BTC #PI