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The Federal Reserve's interest rate decision meeting this week is actually not very suspenseful—no rate cut is practically certain. But the key is that this meeting could very well be an important turning point for the year, because there are signs of inflation resurfacing.
To put it simply, three key points:
First, interest rates will very likely remain unchanged;
Second, economic expectations may be downgraded, but inflation expectations will be revised upward, and internal disagreements on the path of rate cuts will also increase, which is itself a pressure on the market;
Third, Powell will very likely not "turn dovish," but rather could be more hawkish than market expectations.
Whether rates are cut or not is not important; what matters is whether the stance becomes "more hawkish" or "more accommodative."
This week, focus on monitoring volatility—the market is unlikely to remain calm.