April 24-25, 2025, the International Monetary Fund (hereinafter referred to as the Fund) held its 51st Meeting of the International Monetary and Financial Committee (IMFC) in Washington D.C., USA. The meeting discussed topics such as the global economic and financial situation and the work of the Fund.
The meeting noted that the world economy is at a critical turning point. The recent escalation of trade tensions has led to increased uncertainty and market volatility, posing risks to growth and financial stability. The meeting reiterated its support for a strong, quota-based, and well-resourced IMF as the core of the global financial safety net, urging countries to complete the domestic approval process for the sixteenth quota increase under the general review of quotas as soon as possible. The meeting believed that the adjustment of Fund quota shares should aim to better reflect members' relative weights in the global economy while protecting the voice of the poorest countries.
J Powell's passionate speech emphasizes independence, supported by the European Central Bank
On April 26, according to overseas media reports, Powell emphasized at the IMFC meeting on Friday that central banks must stay away from political interference to ensure they can focus on maintaining stable inflation and high employment rates. Powell's remarks sparked rounds of applause from attendees, followed by equally passionate speeches from his colleagues.
Powell stated, "We will never be influenced by any political pressure," adding at the same event, "Let people say what they want to say. It doesn't matter. This is not an issue. But we will act strictly according to our own way, without considering politics or any other irrelevant factors."
Trump recently expressed dissatisfaction with Powell multiple times and repeatedly pressured the Federal Reserve to cut interest rates. However, Powell consistently emphasized the importance of central bank independence and stated that the Federal Reserve does not consider political factors when formulating policies. In last week's remarks, Powell pointed out that he and his colleagues could only be dismissed if there were "justifiable reasons." He emphasized that the independence of the Federal Reserve "is widely understood and supported in Washington and Congress."
European Central Bank President Lagarde also expressed support for Federal Reserve Chairman Powell, stating that Powell is "doing everything he can to fulfill his duties as the Federal Reserve chairman." She said at an event hosted by The Washington Post, "The abilities and capabilities of the Federal Reserve chairman give me peace of mind. I know he is doing his utmost and adhering to discipline to fulfill his mission." Lagarde "respects Chairman Powell very much—I know he is doing everything he can to serve the American people, maintain financial stability, which is closely related to price stability."
The Federal Reserve will begin its routine quiet period starting Saturday before the policy meeting on May 6-7. Market expectations are that the Federal Reserve's interest rate decision next week will maintain the unchanged interest rate for the third consecutive time.
Analysts said that Powell and other officials have indicated their willingness to temporarily stand still, partly due to guarding against the possibility of persistent inflation caused by Trump's tariff policies.
Pan Gongsheng: Will deepen cooperation with the IMF, safeguard global economic and financial stability
People's Bank of China Governor Pan Gongsheng attended the IMFC meeting and delivered a speech.
Pan Gongsheng stated that the current global economic growth momentum is weak, with prominent downside risks. Recently, the US government has recklessly imposed tariffs, seriously infringing upon the legitimate rights and interests of various countries, severely damaging the multilateral governance system based on rules, and seriously impacting the long-term stable growth of the global economy; it has also triggered violent fluctuations in global financial markets, especially in developed economies. This poses a threat to global financial stability and presents a severe challenge to emerging market economies and developing countries. Pan Gongsheng emphasized that China is willing to further deepen its cooperation with the International Monetary Fund and support the Fund in playing a greater role in safeguarding global economic and financial stability.
Meanwhile, during a meeting with World Bank President Ajay Banga, Pan Gongsheng pointed out that the current instability and uncertainty in the world economy are rising, and unilateralism and protectionism severely damage the international economic and trade order, causing significant negative impacts on the global economy. In response to external shocks, the Chinese government has implemented a moderately loose monetary policy and a more active fiscal policy, continuing the upward trend of economic recovery.
In the sixth Foreign Ministers' Meeting between China and Central Asia held in Almaty, Politburo member and Foreign Minister Wang Yi stated that the US has unilaterally imposed tariffs on over 180 countries, infringing upon the legitimate rights and interests of various countries, violating WTO rules, damaging the multilateral trading system based on rules, and undermining global economic stability. By taking necessary countermeasures, China aims not only to protect its own legitimate rights and interests but also to uphold international rules and justice. As the second-largest economy in the world and a responsible major power, regardless of how international circumstances change, China will unwaveringly promote high-level openness, jointly seek development with neighboring countries, share opportunities with the world, and continue to shoulder its due international responsibilities and obligations.
Pan Gongsheng also stated during a meeting with European senior officials that China's economy started well in the first quarter of this year, with increasing positive factors, and macro policies will become more proactive and effective. Pan Gongsheng emphasized that the global economic recovery remains full of uncertainties. China and Europe should strengthen policy communication and coordination through channels such as the Sino-European Central Bank Meeting Mechanism, the Sino-European Financial Working Group, and the Sino-British Financial Working Group, expand mutual financial openness, jointly uphold multilateralism, and inject more stability and certainty into the world economy.
Previously, according to overseas media reports, Trump claimed that negotiations on tariff issues between China and the US were ongoing, while China denied it, calling it "fake news."
JPMorgan Survey: Market Views High Probability of Stagflation in the US, Cash Assets Most Favored
A survey conducted by JPMorgan on Friday revealed that the market generally believes that the risk of stagflation in the US economy over the next year is far higher than the risk of recession, with cash being the most favored asset class in 2025.
JPMorgan stated that the survey was conducted from April 1 to 24, involving 495 investors.
The survey showed that the majority of respondents believed that the trade war initiated by the Trump administration was the most negative policy affecting the US. Sixty percent of respondents believed that US economic growth would stagnate, and inflation levels would remain above the Federal Reserve's 2% target. Among them, about 20% of respondents expected inflation rates to exceed 3.5%. At the same time, the market generally expected the dollar to weaken, with most respondents predicting that the euro-to-dollar exchange rate would reach 1.11 or higher by year-end, meaning the dollar would depreciate by at least 8% this year.
JPMorgan stated, "It is worth noting that there are significant differences in views between US investors and global investors regarding the economic impact and market reaction after the change of the US government."
Due to expectations that the yield on 10-year Treasury bonds will not significantly decline from current levels, cash is expected to remain highly valued. More than half of the respondents believed that the yield on 10-year Treasury bonds would reach or exceed 4.25% by the end of 2025.
Nearly half of the respondents expected Brent crude oil futures prices to remain near the current level of $66 per barrel, while another 30% of respondents predicted that oil prices would fall to $60 per barrel or lower.
Fifty-seven percent of respondents expected that US stocks would be the asset category with the most capital outflows this year.
Bank of America Warns of Temporary Rebound in US Stocks
Despite the rebound in US stocks, some Wall Street institutions remain cautious about the outlook. Historically, since 1980, there have been 10 similar selling events, each accounting for approximately 0.6% of total market value. Compared to those cases, the recent sell-off has been shorter in duration and less severe. However, timing is crucial. This sell-off coincided with investors questioning the Federal Reserve's next move and whether the AI-driven stock market rally had already gone too far.
Notably, in the past 10 instances of foreign investors selling US stocks, the US stock market actually rose in 7 cases. Tech stocks like Tesla and Nvidia are still in the wave of structural growth, even if overseas funds withdraw, they may continue to attract domestic fund inflows. The real question is whether this sell-off is the beginning of deeper global capital shifts or just a brief pause before a large-scale return of foreign funds.
Michael Hartnett, chief investment strategist at Bank of America, advised investors to sell during the rebound in US stocks and the US dollar before uncertainty ends completely. Hartnett and his team noted in their report, "We will still buy when bonds and gold fall and sell when the S&P index/dollar rises." Hartnett added that the "pain trade" in the market suggests there will be more downside space ahead. The report pointed out that the US dollar is in a long-term downward trend, and the trend of funds leaving US assets will continue until the Federal Reserve begins cutting interest rates, the "trade war" ends completely, and consumer spending remains resilient.
A JPMorgan survey released on Friday showed that the market generally believed that the risk of stagflation in the US economy over the next year was far higher than the risk of a recession, with cash being the most favored asset class in 2025. The survey was conducted from April 1 to 24, involving 495 investors. The survey showed that the majority of respondents believed that the trade war initiated by the Trump administration was the most negative policy affecting the US. Sixty percent of respondents believed that US economic growth would stagnate, and inflation levels would remain above the Federal Reserve's 2% target. About 20% of respondents expected inflation rates to exceed 3.5%.
Looking back at this week, US assets experienced a "three-kills" scenario of stocks, bonds, and currency on Monday, with gold and safe-haven currencies like the Swiss franc accelerating their rise, pushing gold prices to new highs. Trump later stated that he had no intention of dismissing the Fed chair and softened his stance on trade tariffs, leading to a rebound in US stocks in the latter part of the week, although they did not recover to the level before the tariff policy was announced on April 2.
In the current context of fluctuating tariff policies, the volatility in US financial markets is receiving significant attention. Although the three major US stock indexes rebounded this week, technology giants performed notably, but deep-seated contradictions in the market intertwined with external shocks, keeping the situation delicate. The ongoing tariff disputes remain a focal point, along with the independence of the Federal Reserve and the stance of the European Central Bank; meanwhile, statements from both China and the US convey key signals; Wall Street institutions have obvious differences of opinion on the outlook for US stocks, and Bank of America has issued a warning.
Tesla's recent stock price trend iFinD
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