#OP The Federal Reserve (FED) FOMC statement and key points from Powell's press conference overview

FOMC statement:
1. Overview of the statement: It was unanimously agreed to maintain the benchmark interest rate at 4.25%-4.50%, remaining unchanged for the fourth consecutive meeting, in line with market expectations.
2. Interest Rate Outlook: The dot plot predicts that the median interest rate expectation for 2025 will remain at 3.9% (with two rate cuts), and the medians for 2026 and 2027 will be adjusted to 3.6% and 3.4%, respectively. Among the 19 officials, 7 believe there will be no rate cuts this year.
3. Inflation Outlook: Inflation remains slightly elevated. The median core PCE inflation expectations for the end of 2025, 2026, and 2027 have been revised up to 3.1%, 2.4%, and 2.1%, respectively.
4. Economic Outlook: The uncertainty surrounding the outlook has diminished, but remains at a high level. The median GDP growth forecasts for the end of 2025 and 2026 have been revised down to 1.4% and 1.6%, respectively.
Powell's press conference:
1. Interest Rate Outlook: Current rates are moderate or somewhat tight, not high. Uncertainty is exceptionally high, so it may be prudent to wait for more information before making adjustments. The Federal Reserve will lower rates when it is confident that inflation is declining. The current employment situation, reasonable economic growth, and gradually falling inflation prompt the Federal Reserve to continue to wait. No officials have great confidence in the dot plot's interest rate path predictions.
2. Inflation Outlook: Inflation levels have remained slightly above target. It cannot be assumed that the inflation shock caused by tariffs is merely a one-time event. A rise in tariff-driven inflation is expected in the coming months. Overall PCE is expected to rise by 2.3% in May, and the core index is expected to rise by 2.6%.
3. Economic Outlook: The economy is in a robust state. It appears to be growing at a rate of 1.5% to 2%. Uncertainty peaked in April and has since weakened.
4. Employment Outlook: The unemployment rate has remained within a narrow range and at a low level. The labor market remains robust. Multiple indicators show that the economy is approaching maximum employment levels.
5. Communication Reform: The framework review will be completed by the end of this summer, at which time consideration will be given to whether adjustments to the communication strategy are necessary. Enhancements to communication tools, such as dot charts, will be considered.
6. Others: Powell did not disclose his plans after stepping down as chairman and refused to comment on Trump's derogatory remarks.
7. Market Reaction: From the announcement of the statement to Powell's speech, gold initially rose and then continued to fall, while the 2Y US Treasury and the dollar moved in the opposite direction; US stocks and Bitcoin experienced slight fluctuations.
8. Latest Expectations: As of the time of writing, the probability of a rate cut by the Federal Reserve in July has decreased from about 15% before the meeting to 10%, while the pricing for rate cuts for the year has risen by about 1 basis point to 48 basis points, indicating close to two rate cuts.