Federal Reserve interest rate decision and key points of Powell's press conference The early morning Federal Reserve interest rate decision remained unchanged as expected, and as expected by the market, the Fed suspended interest rate cuts for two consecutive meetings. The number of opponents of the decision decreased by half compared to the last time. Milan, a council member handpicked by Trump, continues to advocate for a 25 basis point interest rate cut. In the statement on the interest rate resolution, there was a new mention of the uncertain impact of the Middle East situation on the US economy, and the unemployment rate changed from showing some signs of stabilization to 'basically unchanged'. In the dot plot, seven people expect no interest rate cuts this year, 12 people expect at least one 25 basis point interest rate cut, and one person expects four cuts; One person expects to raise interest rates once next year. The median expected interest rates remained mostly unchanged from last time, implying that interest rates are expected to be cut once this year and once next year, and the long-term interest rate expectation has been raised to 3.1%. In the economic outlook, the GDP expectations for today, tomorrow, and the longer term have been raised, the unemployment rate expectations for next year have been lowered, and the inflation expectations for this year and next year have been raised to 2.7% and 2.2%, respectively. Powell's press conference has many highlights: 1) The Federal Reserve will not cut interest rates temporarily, and the possibility of raising interest rates has returned to the discussion range: the Federal Reserve will maintain the target range of the federal funds rate at 3.5% -3.75% unchanged. Powell made it clear that he will not consider cutting interest rates until he sees further improvement in inflation; At the same time, discussions within the committee have begun on whether the next step could be to raise interest rates, although this is still not the basic scenario assumed by most officials. 2) Tariffs and energy are having a 'dual impact' on inflation. Powell pointed out that the current process of inflation cooling has significantly slowed down, and short-term inflation expectations have risen again in recent weeks. The price pressure brought by tariffs is still transmitted to core inflation, and the rising oil prices in the Middle East are also adding new upward risks. Commodity inflation is expected to significantly fall, possibly at least until the middle of this year. 3) The labor market appears stable on the surface, but downside risks are accumulating. Powell acknowledged that employment growth is already at a relatively low level, and the "balance" of the job market itself is inherently fragile in the context of a slowdown in labor supply. At the same time, energy shocks not only push up prices, but may also have a negative chain reaction on employment and overall economic activity by suppressing consumption, squeezing business costs, and disrupting transportation chains. 4) The energy crisis continues to escalate, and international oil prices have risen sharply. The Iran War has led to multiple energy facilities being attacked, and the Strait of Hormuz is facing the threat of blockade. Market concerns about oil supply disruptions have rapidly escalated, with Brent crude oil rising above $107 at one point. Powell emphasized that it is still difficult to determine how long this shock will last and how significant its impact will be, but its potential impact on the US and global economy should not be underestimated. 5) AI has not yet significantly boosted productivity at the macro level, and may even push up neutral interest rates in the short term. Powell stated that the current productivity improvement cannot be attributed to generative AI, as the related impact will take many years to be confirmed. On the contrary, the current large-scale construction of data centers is driving up demand for goods and services, which may increase inflationary pressures and also raise neutral interest rates. 6) Powell confirmed that he will not leave the Federal Reserve during the investigation period and will continue to serve as "interim chairman" if necessary. He stated that he has no plans to resign from his position as a director until the investigation is completed, the process is transparent, and the conclusions are clear; If the successor is not confirmed at the end of the chairman's term, he will continue to serve as interim chairman in accordance with the law until a new chairman is officially appointed to ensure that the operation and independence of the Federal Reserve are not subject to political interference.