00:00 Speaker a
Ali, let’s start with you. You are following some breaking news here. Powell expects the Fed to wait for tax cuts. What do we know?
00:14 Ali
Yes, so we got some prepared comments from Jerome Powell. Quote, at the moment, we have the ability to wait for more information about the economic process before considering any adjustments to our policy position. So that largely repeats what he said at last week’s decision-making press conference. We do know there are several FOMC members, including federal governor Chris Waller and Michelle Bowman, who advocate for more tax cuts, saying inflation is slowing down and that interest rates can be lowered. But Jerome Powell has been saying he wants to see more economic data. He wanted to see how tariffs will affect the economy, how this will affect GDP growth, inflation. Even among the Fed forecasts that are still cutting the two-rate rate by the end of the year, some of the members seem to be more divergent. We have cut tax rates eight times, but seven FOMC officials think we will continue to put aside there. With these interest rate forecasts, we also see that they expect slightly higher inflation, slightly lower growth and slightly higher unemployment. Therefore, this suggests that there may be a more stagnant environment into the second half of the year. Of course, Jerome Powell will bake it all. He is under great pressure, especially President Trump lowers interest rates. But we still have a lot of unknowns in the economy, we had the Fed meeting in July, and then in August, we will also have Jackson Hole. So, track more market mobile activities here.
