Invesco: Uncertainty in U.S. government policy keeps the Federal Reserve cautious, with interest rate cuts possibly delayed until the end of the year
Invesco Asia Pacific (excluding Japan) Global Market Strategist Zhao Yaoting stated that the Federal Reserve's announcement to keep its policy interest rate unchanged at the recent Federal Open Market Committee meeting aligns with market expectations. Looking ahead, the Federal Reserve will closely monitor the impact of tariffs on unemployment rates and consumer prices. The uncertainty surrounding the U.S. government's new economic policy may lead many market participants, including the Federal Reserve, to remain cautious until the market situation becomes clearer. This suggests that while a rate cut by the Federal Reserve is anticipated this year, it may not occur until hard data weakens towards the end of the year. Zhao Yaoting pointed out that although recent Federal Reserve survey data and other "soft" data indicate that the U.S. economy is on the brink of recession, this has not yet been reflected in hard data. Given the unreliability of "soft" data, it is reasonable for the Federal Reserve to rely more on hard data; therefore, it is unlikely that the Federal Reserve will begin to cut rates until the labor market shows significant weakness or the market clearly returns to an anti-inflation path
According to the Zhitong Finance APP, Zhao Yaoting, Global Market Strategist for Invesco Asia Pacific (excluding Japan), stated that the Federal Reserve's announcement to keep its policy interest rate unchanged at the recent Federal Open Market Committee meeting aligns with market expectations. Looking ahead, the Federal Reserve will closely monitor the impact of tariffs on unemployment rates and consumer prices. The uncertainty surrounding the U.S. government's new economic policies may lead many market participants, including the Federal Reserve, to remain cautious until the market situation becomes clearer. This suggests that while a rate cut by the Federal Reserve is expected this year, it may not occur until hard data shows signs of weakening by the end of the year.
Zhao Yaoting pointed out that although recent Federal Reserve survey data and other "soft" data indicate that the U.S. economy is on the brink of recession, this has not yet been reflected in hard data. Given the unreliability of "soft" data, it is reasonable for the Federal Reserve to rely more on hard data; therefore, it is unlikely that the Federal Reserve will begin to cut rates until the labor market shows significant weakness or the market clearly returns to an anti-inflation path
