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美联储守口如瓶,利率前景越来越神秘

The Federal Reserve is tight-lipped, and the interest rate outlook is becoming increasingly mysterious.

Golden10 Data ·  Jan 30 03:33

Powell seems to have alleviated concerns about a shift towards raising interest rates, but it doesn't sound like he is looking for the next opportunity to cut rates.

After the Federal Reserve meeting, the dilemma faced by bond traders has not changed at all: amidst the uncertainty that Trump brings to the economic direction, they have almost no grasp of the interest rate trend.

Due to the Federal Reserve's policy statement seemingly indicating that it will keep interest rates stable, US Treasury yields briefly rose because concerns over the progress in controlling inflation have weakened. However, Powell quickly alleviated these worries, stating that he expects consumer price increases to continue to slow, after which US Treasury yields fell back and closed almost flat.

The stock market's reaction was similar to that of the bond market. The S&P 500 Index fell after the Federal Reserve announced its rate decision, but rebounded after Powell's speech, closing slightly lower for the day due to market concerns over Trump's still unclear tariff policy and the potential threat of low-cost AI products from Chinese AI startups to technology stocks.

"The Federal Reserve is not in a rush to take further action," said Jeffrey Rosenberg, a portfolio manager at Blackrock.

The Federal Reserve decided to pause the rate cut cycle initiated last September, which was completely expected on Wall Street. Since the end of last year, US Treasury yields have risen significantly due to the anticipation of a resilient economy, stubborn inflation, and Trump’s policy shifts preventing further easing of monetary policy.

The resetting of market expectations largely aligned traders with the Federal Reserve, which adopted a wait-and-see approach while observing inflation moving towards the 2% target. Trump has also threatened to impose tariffs on imported goods and has promised tax cuts, both of which could exert upward pressure on inflation and inject a new round of stimulus into the economy, thus creating considerable uncertainty for the outlook.

Powell took almost no action to guide the bond market direction. He stated that he expects the still restrictive rate levels to continue to slow inflation, which seems to alleviate concerns about the Federal Reserve possibly shifting back to rate hikes. He also declined to comment on how Trump's policies might affect the Fed's path, emphasizing that the central bank will follow data guidance.

Bob Michele, Chief Investment Officer of Global Fixed Income at JPMorgan Asset Management, believes that, "It seems the Federal Reserve is not looking for the next rate cut opportunity."

After Powell's remarks supported this speculation, swap traders lowered their expectations for a rate cut by the Federal Reserve this year, reducing the total anticipated cut from 48 basis points to 43 basis points, with the first cut not expected until mid-2025. This indicates that traders expect a 25 basis point cut this year, with insufficient confidence in a second cut.

Traders are no longer pricing in two rate cuts by the Federal Reserve this year.
Traders are no longer pricing in two rate cuts by the Federal Reserve this year.

"Currently, the bond market is more cautious," said Lon Erickson, a portfolio manager at Thornburg Investment Management in Santa Fe, New Mexico. "People are uneasy about the potential impact of the new government's policies."

Although earlier this week, during a stock market plunge driven by Technology stocks that stimulated demand for US Treasuries, bets in the swap market on a rate cut by the Federal Reserve in March increased, the current pricing of this expectation remains low.

Nevertheless, traders increased their bullish bets on US Treasuries ahead of the meeting, hoping the Federal Reserve would signal a possible rate cut in March.

Meanwhile, Wall Street economists have divergent predictions regarding the Federal Reserve's policy path, with most economists adjusting their expectations downward in recent months. Prior to the January meeting, only Morgan Stanley was one of the major banks on Wall Street that still believed the Federal Reserve might cut rates in the next meeting in March.

Guneet Dingra, the head of USA interest strategy at BNP Paribas, stated before the Fed made its decision: "As for the Bonds market, we believe that this waiting mode will be maintained for the next few quarters... We think the Fed will remain inactive for the remainder of 2025."

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The translation is provided by third-party software.


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