OCBC Bank Hong Kong economist Jiang Jing said that the US May CPI inflation was cooler than expected, boosting market sentiment. However, the dot plot shows that the Fed's position is more hawkish than expected, with the median rate forecast showing officials expect one rate cut this year, down from the two they projected in March. After the CPI results were released, the S&P and the Nasdaq rose for three consecutive days to historical highs, but the Dow fell after the Fed meeting. US Treasury yields fell sharply, with 10-year yields hitting their lowest intraday level in almost two and a half months. However, the post-Fed meeting drop has narrowed. The US dollar index fell to a low of 104.257 overnight before recovering more than half of its losses in the session.

Jiang Jing said that the futures market prices indicate that investors still expect two rate cuts this year, the earliest of which may begin in September. After the two-day Fed meeting, the authorities kept interest rates unchanged as expected, and the decision statement changed to moderate progress towards inflation. At the same time, it reiterated that it would not cut rates until it is confident that inflation will fall to 2%. The dot plot shows that no officials expect three rate cuts this year, while four support no rate cuts for the year, up from two before. At the same time, officials expect the pace of rate cuts in 2025 to accelerate, with a total of four cuts, up from three previously.

In addition, the Fed's economic outlook shows that GDP and unemployment rate are expected to remain unchanged this year, while PCE and core PCE inflation are both expected to rise by 0.2 percentage points. Powell said after the meeting that the inflation data so far this year is not enough to give the Fed confidence to cut rates, and more "good data" on inflation is needed to boost confidence.