China International Capital Corporation Outlook on the Federal Reserve Policy: Structural Inflation Rise, June Meeting May Maintain Hawkish Stance

[BitPush] According to reports, CICC stated that we are likely to see a round of price rises in the United States in the coming months, but unlike the period from 2021 to 2022, this round of price increases has more structural and one-time characteristics, rather than being comprehensive inflation. For the Federal Reserve, moderate inflation data is good news, but officials will not make significant decisions based on single-month data. Given that the current labor market remains stable, the Federal Reserve does not need to rush to cut interest rates, and officials may prefer to wait for several sets of data before making a decision. Next week, the Federal Reserve will hold its June interest rate meeting. CICC believes that compared to the dot plot in March when no reciprocal tariffs were seen, the June FOMC may slightly raise its inflation forecast, but due to the resilience of non-farm employment and the cooling of tariffs, the Fed’s assessment of growth may be more optimistic than in March. As a result, Powell’s attitude at this meeting may be hawkish, which could disappoint investors expecting the Federal Reserve to cut interest rates.