Summary of the Fed FOMC statement and key points from Powell's press conference

[Summary of the Fed FOMC Statement and Powell's Press Conference] Summary of the Fed FOMC Statement and Powell's Press Conference: FOMC Statement:

1. Statement Overview: Maintain the benchmark interest rate at 4.25%-4.50%, unchanged for the fifth consecutive time, in line with market expectations.
2. Voting Discrepancy: Governors Waller and Bowman advocated for a rate cut, marking the first time in over 30 years that two governors cast dissenting votes.
3. Inflation Outlook: The inflation wording has not been modified, indicating that inflation remains elevated to some extent.
4. Economic Outlook: Economic growth slowed in the first half of the year, and uncertainty about the outlook remains high. Powell press conference:
5. Interest Rate Outlook: The current policy stance is in a favorable position; no decisions have been made regarding the September meeting; it is not possible to make decisions based on the June dot plot in six weeks, and data will need to be relied upon.
6. Inflation Outlook: The year-on-year increase in core PCE for June may be 2.7%, while overall PCE is expected to rise by 2.5% year-on-year; most long-term inflation expectation indicators are in line with Fed targets; inflation is further from our target than employment; inflation data is expected to be more influenced by tariffs.
7. Economic Outlook: The economy is in a solid position, with indicators showing a slowdown in economic growth; it is not believed that the large and beautiful bill particularly stimulates the economy.
8. Employment Outlook: The labor market remains in a balanced state, with evident downside risks.
9. Tariff Impact: Most estimates of changes to effective tariff rates are not significant; it is reasonable to speculate that the impact of tariffs on inflation is temporary; 30% or 40% of core inflation comes from tariffs; it is still early to assess the impact of tariffs.
10. Explanation of Disagreement: It is expected that the opponents of the resolution will explain their views in the next day or two; two members believe it is time to cut interest rates, and it is not surprising that there are differences.
11. Market Reaction: After the announcement, the market fluctuated little. During Powell's speech, gold's daily decline expanded to $50, and the dollar rose; US Treasury yields rebounded from their decline, with the 10-year yield reaching a high of 4.38% and the 2-year yield approaching 4%; US stocks were under pressure and fell, while Bitcoin briefly dropped below $116,000.
12. Other matters: Trump stated before the announcement of the resolution that the Fed would not cut interest rates this time and indicated that it would cut rates in September.
13. Latest Expectations: Market bets on interest rate cuts are cooling. As of the time of writing, the probability of a rate cut in September is 49.6%, down from about 60% before the interest rate decision; the pricing for rate cuts for the year is 36BP, down from 44BP before the decision.