Federal Reserve Holds Rates Steady for Second Consecutive Meeting, Powell Signals Hawkish Stance, Rate Cut Expectations Significantly Delayed

In the early morning of March 19 Beijing time, the Federal Reserve announced it would maintain interest rates unchanged, marking the second consecutive "hold" since the last meeting. Federal Reserve Chair Powell released notably hawkish signals during the subsequent press conference.

Powell stated bluntly that current U.S. inflation remains stubborn, and uncertainty regarding outlook is rising. He specifically pointed out that certain oil shocks will gradually be reflected in core inflation data, and if inflation management lacks substantive progress, the Federal Reserve will not cut rates. Additionally, he mentioned that several Federal Reserve officials are inclined to reduce the number of future rate cuts.

Regarding personal tenure, Powell indicated that if his successor has not been confirmed by the time his term as Federal Reserve Chair ends, he will continue to serve as "interim chair" to fulfill his responsibilities.

Affected by these hawkish remarks, market rate cut expectations cooled significantly. According to the Fedwatch tool, the next rate cut may need to wait until the end of 2026.

Recently, futures market traders expect the Federal Reserve will only cut rates by 25 basis points before the end of this year.

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