Interpretation of the Fed data at 2 a.m.:

At 2 a.m. on June 13, 2024, the Fed announced its latest monetary policy decision. According to Sina Finance, the Fed decided to maintain the target range of the federal funds rate at 5.25% to 5.50%. This decision was in line with market expectations and was the seventh consecutive time that the Fed pressed the "pause button" to maintain interest rates at a high level in more than two decades. In addition, the Fed's latest "dot plot" shows that expectations for rate cuts this year have dropped from 3 times in March to only 1 time.

There are two major changes in the Fed's statement. First, the description of inflation progress has changed from "lack of further progress" to "moderate further progress has been made." Second, the specific operational description of changes in the balance sheet reduction plan has been deleted, and only mentions that it will continue to reduce its holdings of U.S. Treasury bonds, agency debt and agency mortgage-backed securities.

Fed Chairman Powell said at a subsequent press conference that although inflation has slowed substantially, it is still too high. He emphasized that the inflation data so far this year is not enough to give the Fed confidence to cut interest rates. Powell also mentioned that the Fed will carefully evaluate the new data and its impact on inflation and employment before deciding whether to adjust the target range of the federal funds rate.

Overall, the Fed's decisions and statements show that despite some progress on inflation, the Fed is still cautious about cutting interest rates and tends to maintain the current interest rate level. This means that the market's expected interest rate cuts may not come soon, but more economic data is needed to support the decision to cut interest rates.

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