According to Futu Securities, Zhang Shiqi of BOC Hong Kong stated that the Federal Reserve kept the federal funds rate range unchanged at 5.25% to 5.5%, as expected, and the interest rate dot plot showed officials raising their median rate forecasts for the next two years to 5.1% and 4.1%, respectively, as well as raising inflation forecasts. Zhang Shiqi believes that the interest rate decision reflects the Federal Reserve's cautious attitude towards the pace of inflation decline and it needs time to observe before it can start interest rate cuts. With moderate economic growth and expected inflation decline, it is expected to benefit the stock market in the medium and long term. However, the US stock market has already reached historic highs, and investors should be wary of the volatility that different data affecting interest rate expectations may bring to the US stock market.

Zhang Shiqi believes that two changes in the interest rate dot plot are worth noting. First, the median rate for the end of this year has been raised from 4.6% forecasted in March to 5.1%, which, based on a 0.25% interest rate cut each time, represents a possible interest rate cut only once this year. Second, compared to the distribution of committee members' views on interest rates in March's dot plot, the overall committee also raised their forecast for the median rate at the end of 2024, with relatively consistent views, but there is a larger difference in views on next year's interest rates. After the rate decision meeting, interest rate futures contracts showed that the market expected less than a 65% chance of a 25 basis point interest rate cut by the Federal Reserve in September, while the possibility of a rate cut in November rose to 100%. This shows that the market has certain expectations that the Federal Reserve will maintain the current interest rate level for some time.

Although the latest core consumer price index in the United States has seen the smallest year-on-year increase in more than three years, committee members also stated in the rate decision statement that there is moderate progress towards the goal of inflation approaching 2% in recent months. However, the committee pointed out that there is uncertainty in the economic outlook, and it still highly focuses on the inflation situation, while respectively raising the overall and core personal consumption expenditure price index to 2.6% and 2.8%. Zhang Shiqi believes that based on the current strong US job market and economy with resilient inflation, the Federal Reserve still needs time to confirm that inflation is orderly declining to the target level before it can start interest rate cuts.

Zhang Shiqi believes that the Federal Reserve currently needs to balance the impact of interest rate levels on economic growth while avoiding a rebound in inflation after interest rate cuts begin. If the Federal Reserve starts cutting interest rates too early and financing costs decrease, companies may increase investment under the support of the economy, and it is not ruled out that it will make it more difficult for inflation to fall to the target level or even rebound. Even if interest rate cuts begin, it may need to reverse course and raise interest rates, which will in turn affect investor confidence. Therefore, the Federal Reserve needs time to observe and manage market expectations with a dovish attitude. With moderate economic growth and expected inflation decline, the stock market is expected to perform well in the medium and long term. However, the US stock market has already reached historic highs, and investors should be wary of the volatility that different data affecting interest rate expectations may bring to the US stock market.