FOMC statement:
1. Statement overview: A unanimous vote agreed to keep interest rates unchanged; the discount rate remained unchanged at 4.50%.
2. Interest rate outlook: The language on the magnitude and timing of future actions remained unchanged.
3. Inflation outlook: The statement on progress toward inflation target was deleted, and inflation was reiterated to be "still slightly high".
4. Job market: The unemployment rate is "stable" and the labor market remains "strong", replacing the previous statement that it has slowed down.
5. Economic outlook: Economic activity continues to expand at a solid pace.
Powell press conference:
1. Policy rate: There is no rush to adjust the policy rate; substantial progress in inflation or weakness in the job market is needed to consider rate cuts.
2. Inflation outlook: Inflation is closer to the target, but still a bit high; the statement on changes in inflation is not intended to send a signal.
3. Economic outlook: The economy remains generally strong; GDP is expected to exceed 2% in 2024.
4. Job market: Labor market conditions have cooled, but remain strong; the labor market is not a source of inflationary pressure.
5. Trump's policy: The Fed is concerned about Trump's new policy and will need time to analyze it; it has not contacted Trump and refuses to comment on Trump's remarks.
6. Other statements: Artificial intelligence is an important factor in the development of the stock market, but we are more concerned about the macro economy; the sell-off caused by the artificial intelligence industry is not a substantial and sustained change.
7. Latest expectations: Traders expect the Fed to reduce policy easing this year. The CME "Fed Watch" tool shows that the probability of keeping interest rates unchanged in March has risen from 71.6% before the statement to 77.6%.
8. Market reaction:
Spot gold fell first and then rose, rebounding to $2,758/ounce during the press conference; the US dollar index rose to near the daily high and then fell back to the level before the statement; US Treasury yields were close to the level before the resolution; US stocks fell first and then rose, and the Nasdaq fell more than 1% at one point before narrowing the decline to 0.3%.
