In the evening of March 30 Beijing time, Federal Reserve Chairman Jerome Powell said in a speech at Harvard University that the current monetary policy is in a good position, and interest rates will be kept unchanged, with no consideration of raising interest rates for the time being. At the same time, he will closely monitor the impact of oil price shocks on the economy, which has further delayed market expectations of interest rate cuts.

Powell pointed out that the balance sheet is an effective monetary policy tool, and no downward economic risks have been seen so far. He also mentioned that the difficulties in the private credit market are more like an adjustment rather than a systemic risk. Affected by this statement, the U.S. bond market rebounded across the board, and the 10-year Treasury bond yield once fell to 4.322%. The Treasury bond yields of major economies such as the United Kingdom, Germany and Japan also fell synchronously.

Market pricing shows that bets on the Federal Reserve’s interest rate hike have all been withdrawn, and the market has turned to pricing in the possibility of interest rate cuts this year, but the timing of interest rate cuts is still uncertain. In addition, the U.S. Dallas Fed Business Activity Index in March was -0.2, lower than expected, indicating that the momentum of U.S. economic recovery has slowed down. For the global market, the Federal Reserve’s decision to keep interest rates stable is conducive to easing market fluctuations in the short term, but we need to continue to pay attention to oil price trends, U.S. economic data, and signals of the Federal Reserve’s policy adjustments in the follow-up.