Regarding interest rate cuts! The Federal Reserve's latest statement

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2025-4-1110:24 Henan Top News Official Account

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The actions of the Federal Reserve are becoming increasingly critical.

As the market increases its bets on the Federal Reserve cutting interest rates, several officials from the Fed have intensively spoken out, emphasizing that controlling inflation is the top priority, warning that tariffs may trigger persistent price pressures, and suggesting that there is no urgency to cut rates in the short term.

On April 10, Collins, chairman of the United States of America, said that the United States may reduce interest rates later this year, but the United States may reduce interest rates later this year, but the interest rate will be cut by one step at a time; 美国达拉联储副主席洛根认为,在等待关税对经济影响更清晰化之前,暂时维持interest 稳定是最好的做法; 古尔斯比将关税描述为滞胀性冲击,这对美联储构成挑战,因为没有通用的应对方案来应对这种冲击。

Overnight, the U.S. stock market fell heavily, the index once plunged more than 7%, as of the close, the Dow fell 2.5%, the Pupu 500 index fell 3.46%, and the index fell 4.31%. The "seven giants" of U.S. stock technology fell sharply, and Tesla fell more than 7%.

Federal Reserve officials latest remarks

On April 10, U.S. Eastern Time, Chicago Federal Reserve President Goolsbee (2025 FOMC voting member ) delivered a speech at the Economic Club of New York. In his fireside chat, Goolsbee emphasized that the Federal Reserve's timeline may not necessarily align with market expectations, and that the central bank's goal is to find a consistent path rather than making hasty decisions.

Goolsbee stated that the role of the Federal Reserve is especially critical during turbulent times, and caution is key. He pointed out that the hard data of the economy looks quite positive, with the unemployment rate near full employment levels, indicating a healthy labor market.

Goolsbee pointed out that the economy has been developing along a stable path, which he refers to as the "golden path." He emphasized the increasing importance of soft data, as it has less lag compared to hard data.

In discussing the impact of tariffs, Goolsbee believes that short-term tariffs will not significantly change the economic path. However, he warns that if confidence is lost, it could lead to economic problems. He also acknowledges that there is considerable anxiety within the Chicago Fed's district, including concerns about returning to the economic conditions of the pandemic era.

Goolsbee described tariffs as a stagflationary shock, which poses a challenge to the Federal Reserve as there is no universal response strategy to address this kind of shock. Despite these challenges, he noted that the economy has stable full employment and inflation is on a downward trend.

Earlier today, the U.S. Bureau of Labor Statistics released data indicating that the Consumer Price Index for March in the U.S. rose by 2.4% year-on-year, lower than the market's general expectation of 2.5%; the core CPI increased by 2.8% year-on-year, marking the smallest increase since March 2021.

After the CPI report was released, U.S. President Trump posted this data on social media, on one hand attributing the decline in inflation to the achievements of the new administration, and on the other hand urging the Federal Reserve to lower the benchmark interest rate as soon as possible.

After the release of this CPI data, traders have also increased their bets on the Federal Reserve cutting interest rates, with the market almost fully pricing in a rate cut in June. Traders have also intensified their bets on the Federal Reserve cutting interest rates by a whole percentage point by the end of the year.

"Tariffs or delay in interest rate cuts"

More and more Federal Reserve officials are beginning to worry that Trump's trade policies may trigger a more persistent upward trend in inflation.

Boston Federal Reserve President Susan Collins ( Susan Collins ) recently stated that the Federal Reserve may still have room for rate cuts this year. The interest rate policy is in good shape, and maintaining stability currently seems to be the best option. Tariffs are driving up prices of U.S. goods, which may lead the Federal Reserve to delay rate cuts.

Collins believes that the new price pressures may delay further normalization of interest rate policy, and that maintaining interest rates stable temporarily is the best approach until the impact of tariffs on the economy becomes clearer.

Lorie Logan, the president of the Federal Reserve Bank of Dallas, also warned in her latest speech that Federal Reserve officials must ensure that any inflation triggered by tariffs does not evolve into more persistent inflation.

On April 10th local time, the Dallas Fed released Logan's speech. In the speech, Logan warned that after experiencing the recent round of inflation, the American public's expectations for future price increases may become less stable.

洛根称,"为了可持续地实现我们的双重使命目标,关键在于防止任何与关税相关的物价上涨催生更顽固的通胀。 从目前来看,我认为当下的货币策略立场是恰当的。 ”

Logan pointed out that Trump's unexpectedly high tariffs could raise unemployment and worsen inflation, "The persistence of inflation will depend on how quickly businesses can pass on rising costs, and whether long-term inflation expectations remain stable."

Logan stated that if inflation persists, combined with the experiences of the past few years, it may lead families and businesses to have stronger expectations of future price increases.

Logan stated, "History tells us that once higher inflation expectations become entrenched, the path to restoring price stability will be longer, the labor market weaker, and the economic trauma deeper."

U.S. stocks plummet across the board

On April 10th, Eastern Time, U.S. stocks plummeted across the board, with the Nasdaq at one point dropping over 7%. By the close, the Dow fell by 2.5%, the S&P 500 index dropped by 3.46%, and the Nasdaq decreased by 4.31%.

The "Seven Giants" of the US tech stocks all fell, with Tesla down 7.27%, Meta down 6.74%, Nvidia down 5.91%, Amazon down 5.17%, Apple down 4.24%, Google C down 3.53%, and Microsoft down 2.34%.

In terms of Chinese concept stocks, the Nasdaq Golden Dragon China Index fell by 1.14%, Li Auto rose by 5.3%, GDS Holdings rose by 4.9%, and TAL Education and Xpeng Motors both rose over 3%; Pinduoduo fell over 6%, and Baidu fell over 2%.

On the previous trading day, U.S. stocks rose sharply, with the Nasdaq gaining 12.16%, marking the second-largest single-day increase in the index's history. On that day, U.S. President Trump stated during trading hours that he had authorized a 90-day tariff suspension on certain countries.

Melissa Brown, an executive at SimCorp, stated that investors have become more aware, and uncertainty is a major issue. It is currently difficult to determine whether the market has bottomed out or reached its peak, as both the market narrative and investors' perspectives have changed significantly.

Former U.S. Treasury Secretary and former Federal Reserve Chair Janet Yellen warned that Trump's economic policies represent the "most severe self-harm" under conditions of a well-functioning economy, and the probability of a U.S. economic recession is rising.

Michael Gapen, Chief U.S. Economist at Morgan Stanley, wrote in a recent report that delaying some reciprocal tariffs has indeed helped the market, but it will not reduce uncertainty.

It is worth noting that global investors seem to be losing confidence in the exceptionalism of the United States. U.S. sovereign risk is soaring, and the CDS spreads are rapidly widening. Changes in CDS spreads can reflect changes in the credit risk of sovereign debt, and current data shows that it is nearly as bad as Italy and Greece.

Source: Top Finance