On May 8th, Huatai Securities Research Report pointed out that although the overall soft data in the United States has weakened recently, the hard data remains stable, and there is significant uncertainty in tariff policies and the outlook for unemployment/inflation. The May meeting showed that the Federal Reserve maintains its previous wait-and-see stance and is not in a hurry to cut interest rates. It plans to wait for the situation to become clear before taking action, and the decision to cut interest rates depends on the balance between unemployment and inflation. Looking ahead, the Fed’s subsequent interest rate cuts will mainly depend on the trend of hard data, especially employment data. If the employment data weakens significantly before the June meeting and inflation pressure remains manageable in April and May, there is still a certain probability that the Federal Reserve will cut interest rates in June. Otherwise, the Fed’s decision to cut interest rates again may have to be postponed until July or later. We will continue to focus on changes in US tariff policies and hard data, including employment data, to assess the Fed’s interest rate cut decision.
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