Overview

• The Federal Reserve has maintained its benchmark interest rate at 4.25%-4.50%, with markets now anticipating the first rate cut in July or September and a total reduction of just 0.5% by year-end.
• A 90-day pause on U.S.-China tariffs, reducing levies to 10%-30%, has eased immediate inflation risks and shifted investor expectations for slower monetary easing by the Fed and other central banks.
• Federal Reserve Chair Jerome Powell emphasized a cautious, data-driven approach, citing uncertainty over the economic impacts of trade policies and inflationary risks.
• The Bank of England reduced its interest rate to 4.25% but warned that high wage growth remains a key obstacle to achieving its 2% inflation target, signaling limited scope for further cuts.
• European Central Bank officials, including Isabel Schnabel, stressed the need to halt rate cuts, citing medium-term inflation risks and ongoing global economic pressures.