Key points of Lao Bao's speech at a glance

1. Statement overview: The wording remains largely unchanged, with a decision to cut interest rates by 25 basis points passed by a vote ratio of 11-1, with Hamak supporting the pause in rate cuts. The ON-RRP was lowered by 30 basis points.
2. Interest rate outlook: The 'extent and timing' of further rate cuts will be considered. The dot plot shows an upward adjustment in the median value, indicating two rate cuts in each of the next two years, but some officials have significant differences of opinion.
3. Inflation Outlook: The target time for achieving 2% inflation has been delayed until 2027, and the expected inflation for 2024-2026 has been raised comprehensively. Most officials expect the risk to lean upward.
4. Economic Outlook: Slightly lowering the unemployment rate expectations. The wording for steady economic growth remains unchanged, with an upward revision of the actual GDP growth rate expectations for the next two years, from 2% this year to a significant increase to 2.5%.
Powell Press Conference:
1. Interest rate outlook: When considering interest rate adjustments, caution can be exercised. Changes in statement wording indicate that we are in or approaching a phase of slowing interest rate cuts, and it seems unlikely that there will be an interest rate hike next year. If inflation cannot sustainably move towards 2%, interest rate cuts can be slower. Interest rate cuts that are too slow may hit the economy and employment.
2. Inflation Outlook: It may take another year or two to reach the target; there are high risks and uncertainties; discussions are underway on how tariffs can drive inflation.
3. Economic Outlook: Overall economic performance is strong, with faster-than-expected growth in the second half of the year, and there is no reason to believe that the possibility of economic downturn is higher than usual.
4. Employment prospects: The labor market remains stable, and there is no significant source of inflationary pressure. It has not cooled to a worrying extent and will continue to be monitored.
5. Other statements: (on Bitcoin reserve policy) The Federal Reserve does not allow and has no intention to hold Bitcoin. Today's interest rate decision is a rather difficult choice.
6. Market Reaction: From the announcement to Powell's speech, spot gold plummeted by $56; the US dollar index has risen by 110 points since the announcement, reaching a two-year high; the US 2-year Treasury yield has risen by 15 basis points; the Nasdaq has expanded its decline to 3%; Bitcoin has fallen by over $5000.
7. The latest expectation: Traders' pricing for the Fed's rate cut continues to decrease, with only 37 basis points expected to be cut in 2025, far below the pre-meeting 75 basis points.