The Federal Reserve kept interest rates unchanged, and all three major U.S. stock indexes hit record closing highs. The Nasdaq rose 1.25%, the Dow rose 1.03%, the S&P 500 rose 0.89%, and large technology stocks generally rose. Bitcoin rose to $68,000, an increase of 9.3% in the past 24 hours, and the current price is $67,800.
According to CME Fed Watch data, the probability of the Fed keeping interest rates unchanged in May is 92.3%, and the probability of a cumulative 25 basis point interest rate cut is 7.7%. As for June, the probability of keeping interest rates unchanged is 23.4%, the probability of a cumulative 25 basis point interest rate cut is 70.8%, and the probability of a cumulative 50 basis point interest rate cut is 5.8%.
Federal Reserve Chairman Powell said that the Fed remains focused on its dual mission; although the inflation rate has declined, it is still too high. He said a rate cut could come at some point this year, but the outlook was uncertain and he remained concerned about risks. He emphasized that greater confidence is needed before interest rates are cut, and that he will carefully evaluate the published data to decide on policies. Regarding the issue of the balance sheet, he said that the possibility of slowing down the reduction of the balance sheet was discussed, and believed that an appropriate slowdown would ensure a smooth transition and reduce pressure on the money market.
According to the Fed's dot plot, interest rates may be cut three times in 2024. The federal funds rate is expected to be 4.6% at the end of 2024, 3.9% at the end of 2025, and 3.1% at the end of 2026. The long-term federal funds rate is 2.6%.
