然而，这似乎是自相矛盾的。
Source: Wall Street Journal.
Analysis indicates that it is still too early to assert that the impact of inflation is temporary. This is because the latest predictions from the Federal Reserve show that GDP growth is slowing while inflation and unemployment rates are rising. "There are good doves and bad doves; if this is actually dovish, then it is the bad kind of dovish."
In last night's dovish statement from the Federal Reserve, Powell again mentioned that inflation is "temporary."
However, this seems contradictory. The latest forecasts from the Federal Reserve show that while GDP growth is slowing, inflation and unemployment rates are both on the rise. Allianz's chief economic advisor, Mohamed El-Erian, harshly criticized Powell for once again using "temporary" to describe tariff-driven inflation.
He reminded that the Federal Reserve made a similar mistake in 2022 when they underestimated the persistent price pressures. El-Erian expects Federal Reserve officials to show "greater humility."
"It is still too early to assert that the impact of inflation is temporary."
Despite economists expressing concerns, Powell's remarks triggered a rebound in risk appetite. The S&P 500 Index closed up 1.1% on Wednesday, while the technology-focused NASDAQ 100 Index rose 1.4%.
Bitcoin soared above $85,000, and Gold also reached a historic high, rising 0.5% to $3,050 per ounce.
The Federal Reserve's "dovish" dilemma: the game between inflation and recession.
Adam Kobeissi from The Kobeissi Letter satirized Powell's handling of stagflation concerns, as Powell previously dismissed this risk in a press conference, claiming not to see "stag" or "flation."
However, it now appears that this position is contradictory, as the Federal Reserve's latest forecasts indicate a slowdown in GDP growth alongside rising inflation and unemployment rates.
The financial media outlet modest proposal commented:
"There are good doves and bad doves; if this is indeed dovish, then it is bad dovish, as economic growth has been significantly downgraded while policy remains unchanged. Of course, they will not cut rates because inflation is rising, but they have also indicated an inability to gradually respond to the economic downturn."
Jeffrey Roach, chief economist at LPL Financial, believes that the Federal Reserve's decision is not surprising, as policymakers are "deeply mired in policy fog," waiting for the impact of upcoming tariffs. He emphasized that despite recent inflation data presenting upside risks, core inflation should slow during the summer, allowing the Federal Reserve to start cutting rates in June.
Economic risks under the expectation of interest rate cuts.
Charlie Ripley, Senior Investment Strategist at Allianz Investment Management, emphasizes the Federal Reserve's dilemma in balancing growth and inflation expectations.
The growth appears to have been downgraded more than the increase in inflation expectations; however, the anticipated pace of interest rate cuts remains unchanged.
Ripley also stated that the Federal Reserve's decision to slow down its balance sheet reduction in April provided investors with 'some comfort.'
David Rosenberg, President of Rosenberg Research & Associates Inc., indicated that the Federal Reserve's updated unemployment rate forecast is a strong indicator of an economic recession. He noted that the Federal Reserve currently expects the unemployment rate to rise to 4.4% by the end of this year, which historically signals a recession. If this trend continues, a recession could appear as early as July, which is much sooner than when the Federal Reserve might take any significant action.
Spencer Hakimian, founder of Tolou Capital Management, described Powell as 'very dovish.' He believes that the Federal Reserve either underestimates inflation risks or is hoping for a miracle. He pointed out that despite rising inflation expectations, the Federal Reserve predicts two interest rate cuts, which is clearly a contradictory situation. Despite ongoing concerns, Hakimian remains optimistic about risk assets and suggests investors maintain a 40-50% exposure to risks.
Editor/jayden
Today, after hitting the high near 24,000 in the early session and entering bearish positions, the index fell sharply by nearly over 600 points, immediately recouping yesterday's losses significantly.
Moreover, today it broke the new high again, reaching a maximum of 24,076, but by the end of the market, it fell back by about 70 points, producing a bearish candle. The current trend has not yet been broken, but from the previous low until now, it has risen close to 6,000 points. It is believed that those with positions can continue to hold until there is a clear trend reversal for profit-taking. Those without positions can wait for a pullback to get in. Actually, it is hoped for a quick pullback, as it allows for entry and also provides a healthy breath.
Currently, the outlook remains the same as before. It is believed that even if there is a pullback, it shouldn't be too deep. However, if Futures fail to stabilize and close below 22,350, there may still be room for decline. The chance of Futures falling below 21,400 in the short term should be low, so it is considered that if a significant pullback occurs, it presents a good opportunity to incrementally go long. Recently, there has been a consistent approach to not hold positions overnight, only focusing on immediate trades, as there is no high chasing and no casual short selling.
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