ChainCatcher, citing Jinshi, reported that the market widely believes the Federal Reserve will keep interest rates unchanged. The central bank is still facing uncertainty over the direction of the economy. Although the labor market and consumer spending remain strong, inflation is still above the Fed’s target, leaving policymakers with a difficult balance between economic resilience and price pressures.
The report said attention has turned to how new Chair Warsh would lead the Federal Reserve. Analysts expect Warsh to reshape the Fed’s communication practices and policy decision-making process. The expected adjustments include reducing forward guidance on interest-rate expectations and changing the frequency of press conferences.
The chief economist at Oxford Economics expects the Fed not to raise rates in June, while the wording of its policy communication is expected to be adjusted. The baseline forecast cited in the report is for the Federal Reserve to cut rates in December. The discussion reflects the continued focus on the path of interest rates, inflation remaining above target, and the strength of employment and consumer spending.