The Federal Reserve will not purchase bonds in the primary auction; if tariffs stabilize, interest rates will be cut in the second half of the year

The Federal Reserve reiterated its policy stance of avoiding direct participation in the issuance of government bonds.

On the 22nd, Federal Reserve Governor Waller stated, the Federal Reserve will not purchase bonds in primary auctions.

Waller mentioned in his speech that if the impact of tariffs stabilizes, the Federal Reserve is expected to cut interest rates in the second half of 2025.

He also stated that he "continues to believe that tariffs will be a one-time price increase," and the market is "looking for more fiscal discipline."

"Companies are pausing capital expenditures rather than canceling them."

Market Reaction

After the news was released, U.S. stock index futures plunged briefly. Nasdaq futures fell 0.27% during the day, S&P 500 index futures dropped 0.32%, and Dow futures decreased by 0.45%.

Spot gold's intraday decline narrowed to 0.07%, currently reported at $3,313.16 per ounce. The steepness of the U.S. 5-30 year Treasury yield curve expanded to 100 basis points.

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