According to Caixin Press on March 19 (Editor: Huang Junzhi), the Federal Reserve's two-day monetary policy meeting will conclude this Wednesday, announcing the interest rate decision and the latest economic forecasts summary. The March meeting has become almost a foregone conclusion, with the Federal Reserve essentially remaining "on hold." Therefore, investors should pay more attention to Chairman Powell's speech.

However, Rick Rieder, Chief Investment Officer of Blackrock's Global Fixed Income Division and head of the Global Allocation Investment Team, questions: to what extent can the Federal Reserve Chairman be "dovish" in a situation where inflation is above the Federal Reserve's target? He also expects the Federal Reserve to continue remaining "on hold" this month.

In a recent interview, Rieder stated, "For me, the most important thing in the market is uncertainty." He mentioned market volatility, especially in the stock market.

He further explained that market volatility is intensifying, particularly that the liquidity in the stock market is far less abundant than trading volumes suggest.

"On the surface, the market appears to have enough liquidity, but the actual trading depth is extremely limited. This situation is particularly evident in the stock market, much worse than in the Bonds market," he added.

Analysts generally believe that Powell's speech and the latest economic forecasts summary are the most noteworthy aspects of this meeting. If the latest forecasts indicate that both inflation and unemployment rates may rise, Wall Street's concerns about stagflation may intensify. Currently, worries that tariffs could harm economic growth and drive up Consumer prices have kept investors on edge.

Rieder stated that the market is most worried about the occurrence of a "shift to stagflation," fearing that while economic growth slows down, the inflation rate still exceeds the Federal Reserve's target of 2%. He pointed out that while the market may react positively to Powell's "dovish" signals (if the economy slows down, the Federal Reserve is prepared to lower interest rates faster), sticky inflation may make this move difficult.

"Our inflation rate is far above the target," he said when talking about inflation. "What else can Powell do to 'dove' it?"

Currently, the market is struggling to understand the uncertain trade policy of 'Trump 2.0' to determine whether tariffs will drive up inflation or trigger a recession, and how it might change the path of monetary policy.

Rieder also stated that he expects no economic recession in 2025, but he is concerned that waiting for clarity on tariffs may cause companies to "hold back" on capital expenditures or R&D. He indicated what imposing high tariffs on allies and major trading partners by the USA could mean for the economy, noting that "the market is unsettled by this." Fixed-income strategist Kathy Jones also mentioned that investors are trying to discern the impact of the White House's new policies on tariffs and immigration.

"The market is trying to look ahead, but the uncertainty surrounding tariff developments makes this objective challenging. The issue is that we do not know what will happen in six days, let alone six months from now. This is part of the reason why the economy may slow down," she said.

Jones noted that companies grappling with tariff uncertainty may find it difficult to plan or might pause hiring. However, she stated that she does not expect a recession this year, pointing out that although the USA economy is slowing down, the unemployment rate remains very low and economic growth is 'decent.'

Jones also agrees with Blackrock's perspective: as the market anticipates interest rate cuts later this year, inflation could become a 'stumbling block' for the Federal Reserve, as it has risen to around 3%. She added that this does not leave Powell with 'much room to maneuver.'

Editor/Rocky