Core Points - The Federal Open Market Committee (FOMC) has lowered the federal funds rate target range by 25 basis points to 3.75%–4.00%, marking the second consecutive rate cut since September, aligning with market expectations [1] - The decision received majority support, but two members opposed it, indicating a division in policy stance [1] Economic Assessment - The FOMC noted that economic activity is expanding at a moderate pace, with employment growth slowing and a slight increase in the unemployment rate, although it remains low [2] - Inflation has risen compared to earlier in the year and remains relatively high, which is a key factor in the decision to cut rates [2] Balance Sheet Management - The FOMC announced the end of balance sheet reduction operations starting December 1, with a monthly reduction of $50 billion in U.S. Treasuries and $35 billion in mortgage-backed securities (MBS) [3] - MBS principal repayments will be reinvested into short-term U.S. Treasuries, marking the end of a three-year quantitative tightening phase [3] Policy Outlook - There is uncertainty regarding further rate cuts in December, as the FOMC emphasized a data-dependent approach to future monetary policy adjustments [4] - The availability of key economic data may be impacted by the partial government shutdown, which could influence the decision-making process for the December meeting [4] Internal Divergence - FOMC Chairman Jerome Powell highlighted significant internal disagreement regarding the next steps in policy, with some members advocating for a pause to assess economic conditions, while others support further rate cuts [5][11] - The committee's decision-making will be based on the latest data and changes in economic outlook and risk balance [11]

Group 1 - The Director of the Federal Housing Finance Agency, William Pulte, publicly urged Federal Reserve Chairman Jerome Powell to restart the interest rate cut cycle to alleviate pressure on the housing market [1] - Pulte emphasized that lowering interest rates would directly improve homebuyer affordability and inject much-needed liquidity into the stagnant housing market [1] - The Trump administration has consistently pressured the Federal Reserve to lower borrowing costs, linking tight monetary policy with trade protectionism that suppresses economic vitality [3] Group 2 - Economists point out that the underlying issues in the U.S. housing market stem from structural contradictions, including a growing housing inventory gap and limited new home construction due to rising material costs and labor shortages [3] - The National Association of Home Builders reported that the cost of single-family home construction has increased by 37% compared to 2020 [3] - Over 60% of retail businesses plan to raise end prices in the coming quarters to pass on the cost pressures from tariffs, indicating a cost-push inflation scenario [3] Group 3 - The Federal Reserve has maintained its policy stance despite political pressure, keeping the interest rate range at 4.25%-4.5% after a cumulative cut of 100 basis points in the second half of 2024 [4] - Powell stated that monetary policy will not yield to short-term political considerations, emphasizing the need for strategic consistency amid economic uncertainties caused by tariff disputes [4] - The combination of rising construction costs and labor shortages, along with tariff-induced price increases, poses a dual pressure on the housing market, complicating the Fed's ability to achieve its 2% inflation target [4]

Group 1 - The core viewpoint of the articles indicates that the persistent inflation in Japan is likely to prompt the Bank of Japan to consider further interest rate hikes, with potential increases expected in July or October [1] - Japan's April CPI rose by 3.6% year-on-year, exceeding market expectations, while the core CPI (excluding fresh food) increased from 3.2% to 3.5%, also above forecasts [1] - The "core-core CPI" (excluding fresh food and energy) saw a slight increase to 3%, indicating widespread inflationary pressures, which may lead to a "wage-price" spiral as companies pass on rising labor costs to consumers [1] Group 2 - The technical analysis suggests a bearish trend for the USD/JPY pair, with the Relative Strength Index (RSI) below 50 and MACD indicators indicating a downward momentum [2] - Both the 50-day and 200-day moving averages are trending downwards, suggesting that selling on rallies and breakout strategies are preferred [2]