CICC: The dot plot is slightly "hawkish", but Powell is actively reassuring the market.

On March 20, Jinshi Data reported that in the face of tariff uncertainties, Federal Reserve officials are cautiously optimistic about the economic outlook, with forecasts showing concerns of "stagflation-like" conditions. Although the dot plot leans "hawkish," Powell actively reassured the market, suggesting that there would be no drastic actions. He also stated that the balance sheet reduction will soon slow down to avoid repeating the liquidity shock of 2019. The market reacted positively to Powell's remarks, but we believe that uncertainty in U.S. policy remains, and the economic downward risks cannot be ignored due to tariffs and government layoffs. We maintain our previous judgment that the Federal Reserve may still cut interest rates this year, with the next cut possibly in the third quarter.