Monetary Policy Stance - The policy rate is 100 basis points closer to neutral than a year ago [2] - Policy is not on a preset course and may warrant adjusting [2] - Decisions are based solely on data assessment and its implications for the economic outlook and balance of risks [3] Economic Outlook & Risk Assessment - Near-term inflation risks are tilted to the upside, and employment risks to the downside [1] - The framework calls for balancing both sides of the dual mandate (inflation and employment) [1] - The stability of the unemployment rate allows for careful consideration of policy changes [2]

Monetary Policy Response to Stagflation - The Federal Reserve faces the challenge of responding to stagflationary shocks, such as those potentially caused by tariffs, which have both inflationary and supply-side effects [1] - The Fed aims to mitigate secondary impacts of tariffs, including wage-price spirals and increased production costs for domestic manufacturers due to tariffs on parts, components, supplies, and intermediate goods [1] - Determining which price increases are transitory and which require a policy response is a key task for the Fed [2] Data Dependency and Economic Outlook - Future monetary policy decisions depend on incoming economic data, particularly inflation reports, to gain clarity [3][4] - Strong economic data with inflation trending downwards would support the Fed's decision to lower interest rates to a settling point [3]

Economic Outlook - The Wall Street Journal (WSJ) reporters are analyzing the current economic situation and future expectations [1]

Monetary Policy Stance - The Federal Reserve decided to leave interest rates unchanged, maintaining the range of 425% to 450% [1] - Two governors dissented, favoring a 025% rate cut [1] - It marks the first time since 1993 that two governors have dissented [2] - Nine votes supported keeping rates on hold [2] Economic Assessment - Export fluctuations continue to impact the data [3] - Growth moderated in the first half of the year [3] - Uncertainty about the economic outlook remains elevated [3][4] - The Fed removed "diminished" from the statement, indicating continued high uncertainty [4] - Inflation remains somewhat elevated [4] - Unemployment is low, and the labor market is solid [4] Forward Guidance - The committee has attended to the risks on both sides of the mandate [5] - The statement does not hint at an imminent rate cut in September [5]

Economic Outlook - Singapore's financial sector is projected to experience slower growth in the coming years [1] - Trade and geopolitical tensions are creating uncertainty for Singapore's economic outlook [1] Industry Impact - The trade-dependent nature of Singapore makes it vulnerable to global economic headwinds [1]

Economic Outlook - The economic outlook has brightened a bit, but it's not as rosy as the market looks [1] - Most forecasts still see tariff effects weakening growth and driving inflation higher [2] - The average of 15 forecasts on the street in the CNBC rapid update up almost a percentage point for the second quarter to 25% from 16% in April [2] - The overall year outlook is 13% [3] Inflation and Fed Policy - Average core PCE inflation also came down for the second quarter with what looks to be an expectation of a delayed tariff impact, but it's forecast to shoot up in the third and fourth quarters back towards 3% before settling down next year [4] - Inflation remains a percentage point above and it fuels this debate about whether the Fed should cut now or hold till those numbers start to come down [5] - The Fed's dilemma is weaker growth, but inflation remains relatively high [10] - If the Fed can feel confident that inflation will come down, they could maybe cut a little bit in the back half of this year [11] Tariff Impact - There have been markdowns in the earnings outlook for tariff affected companies [9] - The idea being when you put up GDP numbers that are weaker towards 1%, the theory is that something's got to give in terms of tariffs [8] - It looks like the tariff impact will be a little less, and if we get out of this with a couple quarters of weaker growth, that would be getting off cheap [9]