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Powell's first day of Congressional hearings: there is also a possibility of an early interest rate cut, and it cannot be ruled out that tariffs have a lower-than-expected impact on inflation.
When asked about the possibility of an interest rate cut in July, Powell said, "Many paths are possible," and it may be seen that inflation is not as strong as expected. A decline in inflation and a weak labor market could mean an earlier interest rate cut. Powell stated that tariffs' impact on inflation will be visible in the data for June and July, and at least some tariffs will be borne by consumers, which has not fully restored price stability. The reason the Federal Reserve has not cut interest rates so far is that professional forecasters expect inflation to rise this year, and tariffs bring uncertainty; the economic outlook is "very uncertain." The real estate market is indeed affected by interest rate policies, but in the long term, it does not affect the supply and demand of the market, as interest rates are at a moderately restrictive level.
Bessent: The key differences in the "Big Beautiful" bill will be resolved within 48 hours, and the Senate must start voting by Friday in order for Trump to sign it next week.
Bessent stated that Republican members of both the House and Senate are negotiating key differences regarding the cap on state and local tax deductions (SALT), with a solution expected to be found within the next 24 to 48 hours. The Senate could initiate the multi-day voting procedure for this bill before Friday, after which the House would need to vote on the legislation, allowing Trump to sign it before the self-imposed deadline of July 4.
Bond king Gross: The US stock market is about to enter a "small bull market," while US bonds are in a "small bear market."
Gross believes that the US stock market will enter a "small bull market" driven by AI. Despite facing tariff and geopolitical risks, economic growth can still reach 1-2%. The yield on the 10-year US Treasury bond is unlikely to fall below 4.25%. The surge in fiscal deficits and the weakening of the dollar will drive up inflation, posing challenges to US Treasury bonds. He emphasizes that neither direction of the trend will be overly dramatic, reflecting relatively moderate market expectations.
Support Powell! Federal Reserve Board member: tariffs are expected to "continuously" push up inflation and should continue to be observed.
① Federal Reserve Governor Barr expects that Trump's tariff policy will bring sustained upward pressure on prices, which may impact economic growth and the unemployment rate; ② Barr and Powell both stated that there is no urgency to cut interest rates at present and will watch the economic situation, but there is a division within the Federal Reserve, with some officials supporting a rate cut in July.
Futu Morning News | Tensions in the Middle East are easing, Powell does not rule out the possibility of an early rate cut, both the S&P and Nasdaq hit their highest closing levels in four months.
Israel plans to fully reopen its airspace, and the Iranian president states readiness to engage in dialogue at the negotiating table; on the first day of Powell's congressional hearing: reiterates a wait-and-see approach, will consider actions conditionally, and does not rule out the possibility of an early interest rate cut.
Powell confronts Trump in Congress: The tariff policy is the culprit for the Federal Reserve's decision not to lower interest rates.
Powell stated that if it were not for the new round of tariff measures initiated by the Trump administration on April 2, the Federal Reserve might have already started to cut interest rates.
