Vote 11:1, overwhelmingly passing the hawkish resolution.
The key is that this time it is not employment that is failing, nor is GDP struggling; it is the supply side that has completely exploded:
👉 Oil prices have surged—Middle East is at war, energy prices cannot be suppressed, and the efforts to curb inflation over the past two years have gone to waste.
👉 Freight costs have risen—conflicts have caused supply chain issues, pushing up commodity prices, and inflation could rebound at any time.
The logic of the Federal Reserve is simple: inflation may resurge due to external factors, so I would rather tighten too much than loosen too early.
This is the first time the Federal Reserve has mentioned 'war' in an official document—what does it imply? It indicates that they have considered geopolitical risks as a core variable.
The conclusion is very straightforward: there will be at most one rate cut this year, or maybe even none at all.
Thanks to Trump's Middle East war, the world is paying the price.
Experienced hands suggest just one thing: don't bet on a rate cut, now it's about who can endure high interest rates the longest. Cash is king, don't rush to bottom fish.