With no actions taken and no SEP to discuss (although the statement clearly hints at stagflationary uncertainty), all eyes (and ears) are now focused on every word that Powell says for hints about whether prices (inflation) or jobs (growth) are more of a worry (both are lower recently)...
.. and why he cut rates before the election when financial conditions briefly tightened but refuses to do so now...
Oh and if he mentions, 'soft' vs 'hard' data, it seems that weakness in the soft data mattered last September...
So let's see how Powell explains why it's different this time:
Sept 2024: weak soft data, tight financial conditions, August market crash, cut rates by 50bps
May 2025: weak soft data, tight financial conditions, April market crash, pause
Oh and don't forget that Beijing just slashed rates and flooded the zone with liquidity...
China's central bank cuts key rates, injects 1 trillion yuan 3 hours after agreeing to trade talks to prop up economy and give communist party ammo for negotiations.
— zerohedge (@zerohedge) May 7, 2025
Tomorrow the Fed will do precisely none of that.
Watch the full press conference here (due to start at 1430ET):
