Newsletter summary

The Federal Reserve left interest rates unchanged in MaySlotsofvegas100freespinsIt suggests that it is too early to cut interest rates, denies the problem of stagflation in the US economy, and is expected to slow the pace of balance sheet contraction in June, with risk factors including geopolitics and international oil prices.

Text of news flash

[the Fed's May FOMC decision did not cut interest rates, and the pace of balance sheet contraction slowed.] the Fed did not raise or cut interest rates in its May FOMC resolution, releasing a number of key messages. First, the Fed denied that there was a problem of "stagflation" in the US economy. second, the Fed hinted that the policy adjustment in June was unlikely to raise interest rates, while the rate of reduction in US debt holdings would slow from $60 billion a month to $25 billion a month from June. Although the US economy grew less than expected in the first quarter and market concerns about the risk of "stagflation" increased, the Fed believes that the "stagflation" currently experienced by the United States is not valid. From the perspective of historical stagflation, behind the weakening of economic growth, the weakening contribution rate of personal consumption and investment to the annualized rate of GDP is the main factor. The slowdown in economic growth in the first quarter of this year was mainly dragged down by net exports and government spending, unlike in a typical period of stagflation. The Fed's "recalibrating" policy is mainly a change in time rather than a change in direction. Although the inflation figures are higher than expected, the Fed believes that annual changes show that inflation is still falling, that consumption of excess savings may gradually lead to weaker consumption of services, and that historical data show that it is risky for high interest rates to remain high for too long. As a result, the Fed's recalibrating policy may only delay the cut in interest rates, not change the direction of the policy adjustment. The risk factors that need to be paid attention to include geopolitical risks and the higher-than-expected rise in international oil prices. [risk hint: investment is risky, information is for reference only. ]