May 8th, the Federal Reserve released its interest rate decision, announcing that it would maintain the federal funds rate range at 4.25%-4.5% unchanged.

Subsequently, Federal Reserve Chairman Powell held a press conference, stating that the Fed was not in a hurry to act and that there might be situations suitable for either cutting rates or staying put in the future. Powell also stated that President Trump's call for rate cuts "will in no way affect our work."

Data shows that during the period from the interest rate decision to Powell's speech, gold first rose then fell, with a fluctuation of more than 30 dollars; the US dollar strengthened by about 30 points; US Treasury 2Y bonds first fell then rose, finally falling by about 2 basis points; US stocks fluctuated downward, closing higher at the end.

Last night, the S&P 500 index rose by 0.43%, closing at 5,631.28 points. The Nasdaq Composite Index increased by 0.27%, reaching 17,738.16 points. The Dow Jones Industrial Average then rose by 284.97 points, or 0.70%, closing at 41,113.97 points.

In terms of specific companies, the rise of Disney's stock price contributed significantly to the increase in the Dow Jones Industrial Average this time. The company's second-quarter earnings exceeded expectations, and the number of streaming media users unexpectedly increased, causing its stock price to soar nearly 11%.

Fed releases key information, Powell speaks

At 4:00 AM on May 8th, the Federal Reserve announced that it would maintain the federal funds rate range at 4.25%-4.5% unchanged. This is the third consecutive meeting where the Fed has stayed put. The statement emphasized that the risks of high unemployment and high inflation have both increased.

Following this, Chairman Powell's speech at the press conference also released many policy signals. He said that the Fed was not in a hurry to act, and that there might be situations suitable for either cutting rates or staying put in the future. Powell also stated that President Trump's call for rate cuts "will in no way affect our work," and he has never requested to meet with any president and will not do so in the future.

Screenshot of Powell's speech

After the release of the Federal Reserve's monetary policy statement on Wednesday, Chairman Powell denied any preemptive rate cut ideas at the press conference. He emphasized that the current inflation rate is still above the target level. Powell said, "This is not a situation where we can act preemptively because, before we see more data, we actually don't know what the right response to the data should be."

Powell said that the tariffs announced by Trump on April 2nd were "significantly higher than our expectations," and the negotiations between the United States and major trading partners may have a significant impact on economic prospects.

However, Powell also emphasized that the Fed is "in a favorable position" to observe how all the uncertainties surrounding the tariffs imposed by the Trump administration will develop.

"I think we don't know enough yet. But we are in a good position to wait and see. We don't need to rush. The economy has always been very resilient. Our policy positioning is good. The cost of waiting for further observation is quite low." Powell said, "I can't tell you how long it will take, but for now, we can afford to wait a little longer."

Powell also stated that if Trump's tariffs remain at their current levels, this could delay the achievement of the Fed's authorized goals. "Given the scope and scale of the tariffs, we will definitely see higher inflation risks, and higher unemployment has already increased. If that's what we see - if the tariffs ultimately fall to unknown levels, we won't see sustained declines in inflation." he said, "We may see this delayed."

Powell clearly pointed out that this could delay the Fed's schedule for achieving its inflation target to around next year.

Additionally, Powell was again asked about his relationship with the U.S. President.

Despite Trump's continuous criticism of Powell, Powell said he has never requested to meet with Trump or any other official. Powell said, "I have never requested to meet with any president and never will."

"I wouldn't do that. I have no reason to request a meeting. I don't think seeking a meeting with the president depends on the Fed chairman." He also reiterated that Trump's work and work style have absolutely no effect on the Fed.

David Kelly, chief global strategist at J.P. Morgan Asset Management, pointed out that the Fed's statement "is equivalent to sending a warning to the government," indicating that its policies are increasing the risks of inflation and unemployment. He further analyzed: "This is a slightly hawkish statement. The Fed conveys the message 'we won't be in a hurry to cut rates because both of our goals are in uncertain risk.' "

After this meeting, market expectations for the Fed to cut rates in the short term have cooled somewhat. Although investors generally believe that the Fed will cut rates in the second half of the year, the specific timing may be further postponed. The market is currently reassessing the policy path, believing that under conditions of increasing uncertainty, the Fed is more inclined to "stay put" and wait for more actual data to confirm the direction of the economy.

Vance says negotiations with the EU are ongoing

U.S. Vice President Vance said that negotiations with the EU are ongoing, hoping that European markets will open up to American goods. Relations between the United States and Europe have deviated from track in some aspects, and both sides should encourage efforts to get back on track.

Vance also urged the EU to reduce tariffs and regulatory barriers and open the door to American weapons manufacturers.

Regarding these remarks, European Commission Vice-President Šefčovič, responsible for trade and economic security, said that if the tariff negotiations with the United States fail to reach an agreement, the EU will announce details of the next phase of countermeasures against US tariffs on August 8th.

Šefčovič said that negotiations are still the top priority, but the EU will not reach an agreement at any cost. The EU will not "put all its eggs in one basket."

In April this year, the EU voted to approve the first round of countermeasures against US tariffs, proposing to impose a maximum 25% tariff on a series of US products. These measures were postponed until July after the 90-day deferral period for the US announcement of so-called reciprocal tariffs.

The Trump administration plans to cancel AI chip restrictions from the Biden era

According to informed sources, as part of a broader effort to revise semiconductor trade restrictions, the Trump administration plans to cancel AI chip restrictions from the Biden era, which have drawn strong opposition from major technology companies and foreign governments. A spokesperson for the U.S. Department of Commerce said that Biden's AI rules are too complex and bureaucratic, and they will be replaced by a much simpler rule.

Informed sources said that when the so-called AI proliferation rule takes effect on May 15th, the Trump administration will not enforce it, although this cancellation decision has not yet been finalized. A spokesperson for the U.S. Department of Commerce said: "Biden's AI rules are too complex and bureaucratic, hindering American innovation. We will replace them with a much simpler rule that will unleash American innovation and ensure U.S. dominance in the AI field." Informed sources said that during the formulation of the new rule, the U.S. Department of Commerce will continue to strictly enforce chip export restrictions.

It is understood that the policy divides countries into three categories to regulate chip exports by companies like NVIDIA. The first category includes major allies and partner countries/regions of the United States, which can procure advanced AI chips without restriction. The second category includes about 140 other countries/regions, which will face procurement restrictions: each country will be able to purchase approximately 50,000 AI GPUs from 2025 to 2027. The third category includes about 22 countries and regions such as mainland China, Iran, North Korea, Belarus, Russia, Venezuela, Nicaragua, and Syria, which will almost completely be banned from importing advanced AI processors from the United States.

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Source: https://www.toutiao.com/article/7501880423656489522/

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