Core Viewpoint - The Federal Reserve's economic forecasts are likely to remain largely unchanged, with expectations of two interest rate cuts this year and further reductions in 2026, ultimately reaching a policy rate of 3% [1] Group 1: Economic Predictions - The Federal Reserve is expected to lower interest rates twice this year, driven by economic growth remaining below trend levels [1] - The landing zone for the economy may be described as "roughly neutral" by the Federal Reserve [1] Group 2: Inflation Concerns - Initial signs of tariff-related inflation are beginning to emerge, prompting some officials to adopt a cautious stance [1] - Tensions in the Middle East could further threaten the inflation outlook [1] Group 3: Potential for Changes - There is a possibility that forecasts may change to reflect an interest rate cut later this year [1]

Core Viewpoint - The current inflation situation is favorable, allowing the Federal Reserve to maintain a cautious approach to interest rate adjustments, with no immediate need to change rates [1][10]. Inflation Situation and Rate Adjustment - The potential inflation outlook is positive, indicating stable price levels and a healthy economic trajectory, which provides the Federal Reserve with more policy flexibility [3]. - The Federal Reserve does not need to rush into interest rate adjustments, as the costs of waiting are relatively low, reflecting a balanced approach to economic growth and inflation risks [4]. Cautious Attitude Towards Rate Cuts - There is uncertainty regarding rate cuts, with the Federal Reserve acknowledging that in some cases, cutting rates this year may be appropriate, while in others, it may not be [5]. - The Federal Reserve emphasizes the need for flexibility in policy adjustments based on economic data and market changes, rather than committing to a specific interest rate path [5]. Consideration of Dual Mandate - The Federal Reserve must consider the distance between its dual mandates of price stability and maximum employment, especially when these goals conflict [6]. - Balancing these two objectives is crucial in the decision-making process, highlighting the importance of coordination between them [6]. Flexibility in Policy Adjustments - The Federal Reserve is prepared to act swiftly if the situation warrants, demonstrating its adaptability and responsiveness to economic developments [7]. - Close monitoring of economic data and market dynamics will guide timely policy adjustments to ensure stability and sustainable growth [7]. Management of Market Expectations - The Federal Reserve's communication reflects an intention to manage market expectations by emphasizing the flexibility and uncertainty of policy adjustments [8]. - This approach aims to stabilize market confidence and promote smooth economic operations [8].