「Fed's Bullhorn」: Rate Cut Prospects Dimmed Regardless of Ceasefire

BlockBeats News, April 9th, Nick Timiraos, known as the "Fed's megaphone," analyzed that the Fed's rate cut expectations are quickly cooling down, and the Middle East situation change is no longer a key variable.

The latest FOMC meeting minutes show that with inflation stabilizing and a strong labor market, the Fed has kept the interest rate in the 3.5%-3.75% range, adopting a more cautious policy path. Most officials believe that the impact of tariffs, energy price pass-through, and rising inflation expectations may slow down the decline in inflation more than expected.

The analysis points out that even if a ceasefire is reached, it may not necessarily trigger a rate cut. On the contrary, easing of conflicts could weaken the downside economic risks, highlight the inflation issue, and thus prolong the period of high interest rates.

Fed Chair Powell also warned that the Fed is currently facing multiple overlapping supply shocks, with a risk of uncontrolled inflation expectations. Some officials have hinted that if inflation remains persistently above target, they do not rule out reconsidering the possibility of raising rates. Overall, the market's optimistic expectations of a rate cut within the year are cooling down, and the Fed's policy shift timeframe is being further pushed back.