Fed Thursday meeting focus: Intrerest Rate dot plot, quantitative tightening adjustment, tariff impact assessment…

With signs of recession emerging and market sentiment tight, the Fed is about to convene a FOMC meeting to weigh inflation risks against a slowdown in rise. This article will analyze the impact of policy stances, economic forecasts, dot plots and quantitative tightening on the market, and predict potential risks and opportunities. This article is from an article written by Jinze and reprinted by wublockchain. (Summary: U.S. Treasury Secretary Bencent: "There is no guarantee that the economy will not decline" but the current pullback is harmless, and Trump is preventing the financial crisis from breaking out again) (Background supplement: US poll: only 10% support expanding industrial spending, more than half oppose Trump's construction of BTC reserves. Fed officials must be watching the signs of recession and the financial markets are buzzing, so the central contradiction at the March FOMC meeting is the need for policymakers to weigh between "rise slowdown" and "inflation stickiness" and whether to hedge against "Trump uncertainty" in advance. If the meeting sends signals including "lower inflation tolerance + later interest rate cuts" and ignores the chaos caused by Trump's fiscal and tariffs, this will push US bonds, US stocks and crypto world down, and the US dollar will strengthen in the short term; (Of course, the probability of putting together these hawkish elements is very low) Conversely, if the US Federal Reserve believes that the current inflation is driven by transitory factors (e.g., tariffs, supply chains), or believes that the risk of recession is greater than the risk of inflation, and therefore tolerates inflation temporarily above the 2% target, or triggers an advance in the expectation of a rate cut, then Favourable Information risk assets. In addition, if the Fed is too worried about economic growth, even point shaking expectations may bring short-term panic to the market, temporary or disorderly fluctuations. The following is a detailed explanation of the specific points that need to be followed: c 1. Intrerest Rate Decision Making and Policy Stance Whether to keep the Intrerest Rate unchanged: It should not be surprising that all agencies unanimously expect the US Federal Reserve to maintain the target range of the Federal Fund Intrerest Rate at 4.25%-4.50%, continuing the "no rush" position. If something goes wrong, close your eyes. Policy statement wording: Follow whether the statement adjusts assessments of economic rise, inflation, and risk balances (e.g., from a "strong rise" to a "moderate slowdown"), and whether to retain FIOP [ f still emphasizes tight labor markets. If the declaration emphasizes inflation stubbornness, it may suppress risky assets; If the risk of inflation is downplayed, it may boost the stock and currency markets. 2. Economic Forecast Adjustment (SEP) RISE and the Unemployment Rate: Wall Street expects US Federal Reserve officials to slightly lower GDP growth in 2025 (from 2.1% to 2.0%), reflecting the drag on trade policy and slowing consumption, with the unemployment rate likely to remain low (4.3%). Inflation Path: Core PCE inflation was last forecast at 2.5%, which could be revised upwards if officials take into account tariff transmission and payroll stickiness, which is a bad signal. It is also important to see if long-term inflation expectations are "de-anchored" (such as the latest University of Michigan inflation forecast jump to 3.9% warning). Market Impact: If the downward revision of GDP growth and the upward revision of the core PCE inflation forecast come true, it represents a rise in stagflation expectations, which may suppress risk assets, Favourable Information Gold. 3. Dot plot of interest rate cut signals Median number of rate cuts in 2025: The current market expectation is two (25bp each), and it is necessary to observe whether it is maintained, decreased (once) or increased (three times). Long-term neutral Intrerest Rate(r*): The perception that trade policy drives up supply-side costs could lead to an upward revision of r*, suggesting less room for rate cuts. Committee disagreement: Follow the degree of discrete distribution of the dot plot, if the 2025 forecast is concentrated on 1-3 rate cuts, the policy path is more uncertain. Market Impact: Stagflation signals have emerged, so the core of this dot plot is to verify the US Federal Reserve's tolerance for the risk of "stagflation". If the dot plot implies fewer rate cuts (1), short-end yields jump, Unfavourable Information risk assets; More rate cuts (3 times) boost risk appetite. If the bitmap shows more rate cuts, verify that the core PCE forecast is revised down in tandem (originally 2.8%). Contradictory signals (more rate cuts + higher inflation) will cause market chaos. 4. Quantitative Tightening (QT) Adjustment Plan Balance sheet reduction cadence: QT adjustments may include slowing the balance sheet reduction cadence or suspending MBS's reduction (currently $35 billion per month). Reinvestment strategy: Follow whether MBS repayments are proportionally reinvested in Treasuries (neutral strategy) or biased towards short-term notes (Bills), which may exacerbate short-end distortions, especially as the debt ceiling has led to a reduction in bills issuance. If reinvestment is biased towards neutral or long-term bonds, it may depress long-end yields and ease term premium pressure, which is an additional Favourable Information. Market Impact: This could be the biggest Favourable Information potential for this meeting, and possibly Favourable Information Risk Asset Rebound if the QT end schedule is clarified, or the expectation of easing market liquidity pressure. 5. Trade Policy and Inflation Risk Tariff Impact Assessment: Does the US Federal Reserve mention the two-way impact of trade policy uncertainty on RISE and inflation in its announcement or press conference (some agencies expect that tariffs may push up the core PCE by 0.5pp). Does it hint at concerns about the risk of "stagflation" (markets are pricing in a recession, but the US Fed will follow inflation more). If inflation expectations get out of control, whether to send a hawkish signal of "rate hike if necessary" (low probability, but need to be vigilant). Market impact: If the Fed emphasizes inflation stickiness, the actual Intrerest Rate rise suppresses gold; If stagflation is acknowledged, risky assets are dumped. If inflation is manageable, wait and see. 6. Debt ceiling and fiscal policy risks Government shutdown risk: The debt ceiling impasse is still unresolved, and whether the US Federal Reserve will hint at Liquidity support measures (such as adjusting the SRF tool) in advance will be a message from Favourable Information. Fiscal drag: Whether the impact of government spending cuts on economic rise is factored into SEP projections (e.g., federal layoffs dragging employment). Market impact: The market impact here may be a bit tricky, generally speaking, if the Fed is very worried about the Treasury market chaos and pessimism about economic rise expectations, the first time the market may follow a panic dumping, and then attention may return to the Fed's point shaking expectations, so if it happens, the market may not find a direction in the short term will be disorderly and large fluctuations. Related reports BlackRock CEO warns: The market underestimates the inflationary pressure brought by Trump, and the Fed may not be able to cut interest rates What "fatal details" are hidden in the new US stablecoin regulation rules? Former executive of China's Central Bank: US encryption hegemony threatens China's financial security, but BTC bubble burst "will hit the United States hard" "Fed Thursday meeting follow highlights: Intrerest Rate dot plot, quantitative tightening adjustment, tariff impact assessment..." This article was first published in BlockTempo's "Dynamic Trend - The Most Influential Block Chain News Media".