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U.S. stock market outlook | All three Equity Index futures are up, and the Federal Reserve's interest rate decision is imminent.
On May 7th (Wednesday), in Pre-Market Trading, the three major U.S. equity index futures all rose.
What caused the rapid reversal of the latest sell-off in the USA? Deutsche Bank: The main reasons are policy easing and the economy not entering recession.
Deutsche Bank stated that this round of market reversal is mainly attributed to three points: macroeconomic data shows that the USA economy has not fallen into recession; the decline in oil prices has alleviated inflationary pressures, providing room for potential interest rate cuts. Finally, the policies of the USA government have softened, and the tendency for trade protectionism has weakened.
U.S. stock valuations have reached warning levels again! The market is treading carefully before the Federal Reserve's decision.
The recent rebound in the stock market has caused valuation levels to rise again, and with the Federal Reserve about to announce its MMF policy decision, the market cannot afford any mistakes.
Under pressure from Trump, the Federal Reserve may still choose to "wait and see" tonight, but how much longer can Powell remain strong?
Currently, the "hard data" of the USA economy remains strong, and with the USA government's more moderate attitude towards tariffs, it is highly likely that the Federal Reserve will keep interest rates unchanged tonight. The focus will continue to be on comments regarding the impact of tariffs and guidance on future rate cuts. Powell may reaffirm his wait-and-see stance, observing how tariff policies permeate actual economic data before deciding on the next steps.
The pace of monetary easing has suddenly slowed! Global central banks are displaying strong wait-and-see sentiment, and the market's focus is on the Federal Reserve.
As trade tensions escalate, leading to increased uncertainty in economic growth and inflation prospects, the trend of interest rate cuts among major Global central banks significantly cooled in April.
Risk aversion has eased, and the US dollar against the Japanese yen has slightly rebounded, waiting for the Federal Reserve's interest rate decision to be finalized.
The Japanese Yen weakened during Wednesday's Asia session, ending a three-day appreciation against the USD. With major Asian nations and the USA set to hold high-level trade discussions in Switzerland, the Global market's risk sentiment improved, reducing investors' demand for traditional safe-haven assets like the Yen, leading to a steady rise in the USD/JPY Exchange Rates, trading around 143.00. On the USD side, there was a slight rebound ahead of the Federal Reserve's policy decision, influenced by some investors repositioning. The market widely expects the Federal Reserve to keep interest rates unchanged, thus the focus is on the wording of the statement and Chairman Powell's speech. Any hints regarding future rate cut paths could have a significant impact on the USD's movement.
The surge of the New Taiwan Dollar is just a rehearsal, and USD Assets are facing a "2.5 trillion selling pressure"?
The renowned economist Stephen Jen warned that exporters and investors in Asia may have accumulated an "extremely large" reserve of dollars over the years. As the trade war led by the USA intensifies, some Asian investors may repatriate substantial amounts of capital, which could trigger a large-scale Outflow of dollars.
Countdown to the Federal Reserve's interest rate decision, Goldman Sachs expects there will be three more rate cuts this year.
Goldman Sachs predicts that the Federal Reserve may cut interest rates three times in the coming months, specifically in July, September, and October, for a total reduction of 75 basis points.
A capital flight of 2.5 trillion US dollars: could Asia's reversal of capital trigger a dollar collapse?
① Stephen Jen, the founder of the famous 'Dollar Smile Theory,' stated on Wednesday that as Asian countries gradually reduce their dollar reserves, the dollar may face a 'avalanche' sell-off of up to 2.5 trillion dollars; ② Macro strategist Simon White also mentioned last week that after the trade war, a capital war is a logical next step, which will have adverse effects on USA Treasuries, risk assets, and the dollar.
Europe Natural Resources Fund: The likelihood of the Federal Reserve lowering interest rates in June has decreased, still bullish on Gold.
The market believes that the likelihood of the Federal Reserve cutting interest rates in June has decreased from 73.7% four weeks ago to 30.2% last Friday.
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The USA shipping industry warns that inflation is back: customers report that product costs have increased by 250% month-on-month.
According to the Los Angeles Port Authority, its cargo volume this week has decreased by 35% year-on-year, with the volume of imported goods from China dropping by more than 50%. The USA Retail Federation expects that in the second half of 2025, the import volume in the USA will decrease by at least 20% year-on-year, and imports from China will decline by 75% to 80%. Experts point out that the reduction in cargo transport will quickly lead to commodity shortages, which will trigger a rapid rise in inflation levels.
Goldman Sachs outlook for the May Federal Reserve meeting: the threshold for interest rate cuts is higher than in 2019, and it is necessary to wait for employment and other hard data to weaken.
Analysts including Jan Hatzius from Goldman Sachs have stated that inflation and inflation expectations based on surveys are currently much higher, and decision-makers need to see more compelling evidence of an economic slowdown before taking action. The strongest argument for interest rate cuts would be if Federal Reserve officials believe that data indicates the unemployment rate may continue to rise, which means that other signs such as rising unemployment, weak wage growth, and companies becoming cautious or weak demand growth need to be observed.
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Trump's "interest rate cut dream" may be shattered? JPMorgan: The Federal Reserve is in a dilemma and reluctant to take any rash action!
① JPMorgan pointed out that despite President Trump's call for the Federal Reserve to lower interest rates, the Federal Reserve may not lower rates at this week's policy meeting, and the likelihood of rate cuts in subsequent meetings is also low; ② Federal Reserve officials face dilemmas in monetary policy, mainly due to rising inflation expectations and the economy's recession not yet being absorbed by the market.
Before the Federal Reserve announces its interest rate decision, traders' expectations for a rate cut have cooled: betting on only three times this year.
Traders bet that the Federal Reserve will need to wait longer to continue lowering interest rates.