As a result of the U.S. Federal Open Market Committee (FOMC) regular meeting in May, it was decided to maintain the benchmark interest rate at the current 4.25% to 4.5%. Jerome Powell, chair of the Federal Reserve (Fed), noted that "uncertainty about the economic outlook has increased further." Some securities companies projected on the 8th that the timing of potential interest rate cuts could be later than previously anticipated based on the FOMC results and Powell's press conference.
Securities companies noted that Powell emphasized the need to wait until inflation and employment-related crises become evident in the data. It was interpreted that there is a high possibility of maintaining the benchmark interest rate at the upcoming June FOMC.
Woo Hye-young, a researcher at LS Securities, stated, "Powell has emphasized several times that he will observe the situation more than ever and that he will wait and not rush, and his comments that the cost of waiting is quite low have increased the possibility of a June benchmark interest rate freeze," adding, "Powell dismissed the possibility of a preemptive interest rate cut, noting that the situation is different from 2019, which also lent weight to the potential for a freeze in June."
An Ye-ha, a researcher at Kiwoom Securities, remarked, "The Federal Reserve is expected to delay the timing for resuming interest rate cuts to July instead of June," adding, "Given that there are no clear signs of contraction in the latest April indicators, it will be difficult to make a move."
Kim Ji-na, a researcher at Eugene Securities, predicted that the next interest rate cut would not occur until September. He stated, "The timing of the next interest rate cut could be accelerated depending on the pace at which the slowdown in economic indicators such as GDP for the second quarter (April to June) materializes, but for now, I expect that the likelihood is low," adding, "It will be a summer of patience in observing the data flow."
However, there were also opinions that the Federal Reserve would increase the pace instead of delaying the timing of interest rate cuts. Kang Seung-won, a researcher at NH Investment & Securities, said, "The Federal Reserve wants to avoid the risks of policy failure (overly loose monetary policy) due to preemptive responses and has explicitly chosen 'lagging response,' which suggests changing the timing of interest rate cuts from the previously anticipated months of June, September, and December to July, September, and October."
Since the Federal Reserve has shifted all responsibility due to President Donald Trump's tariff policy, the progress of trade negotiations is expected to become important for the stock market in the future. Lee Kyung-min, a researcher at Daishin Securities, noted, "Not only in the U.S., but also major global stock markets have retraced 61.8% of the decline caused by tariff shocks, reaching the first inflection point," adding, "Until the results of the U.S.-China trade negotiations are confirmed, we will inevitably be swayed by trade negotiation issues and the outcomes of key economic indicators."