#美联储加息预期再起 The Federal Reserve's rate cut expectations have weakened. Why has the discussion of rate hikes resurfaced?

Recently, discussions about the Federal Reserve's monetary policy direction have heated up again. The previously widely anticipated prospects of rate cuts are experiencing marginal adjustments, and the possibility of rate hikes has re-entered the public eye. This change has sparked broad attention to the outlook for the U.S. economy and the Fed's policy path.
From market performance, the previously downplayed rate hike expectations are gradually returning. Although the latest dot plot from the Federal Reserve still indicates the possibility of one rate cut within the year, expectations in the interest rate market have shown noticeable fluctuations. Data shows that the yield on the 2-year U.S. Treasury, which is highly sensitive to policy rate changes, has recently risen significantly, reflecting a reassessment of the monetary policy outlook.
Discussions within the Federal Reserve about policy direction have also increased. Several Fed officials have recently commented on inflation pressures and economic growth prospects, emphasizing that vigilance regarding inflation remains an important consideration in policy decisions. Fed Chair Jerome Powell previously stated that he would not easily adjust interest rate policies until confirming that inflation is steadily improving.
Analysts point out that recent volatility in international energy prices is one of the key factors contributing to uncertainty about U.S. inflation prospects. Changes in energy costs have transmission effects on overall price levels, making the Fed more cautious when formulating subsequent policies.
Hu Jie, a former economist at the Federal Reserve and a professor at Shanghai Jiao Tong University’s Shanghai Advanced Institute of Finance, stated that the trend of energy prices will largely influence the subsequent policy pace of central banks worldwide. Besides price factors, concerns about U.S. economic growth momentum are also rising. Some institutions suggest that, in the context of sustained high interest rates and the gradual withdrawal of fiscal support, U.S. economic growth faces certain pressures.
Some analysts believe that the U.S. economy currently faces both inflationary pressures and risks of slowing growth, which presents a challenge for the Fed to balance its dual goals of “promoting employment” and “stabilizing prices.”
In terms of policy response, most opinions suggest that the Fed is more likely to maintain its current stance in the short term and remain on the sidelines.
Dong Zhongyun, Chief Economist at China Securities, analyzed that rate hikes are a relatively extreme policy scenario, requiring strict trigger conditions, with multiple economic indicators deviating significantly from current trends simultaneously. He pointed out that, based on current U.S. economic data, the conditions for triggering a rate hike are not yet met, so the Fed is more likely to keep rates steady and continue observing economic and inflation trends.
Currently, market focus on the Fed's policy path has shifted from “when to cut rates” to a broader “policy outlook assessment.” Against the backdrop of intertwined factors such as inflation, employment, and economic growth, the Fed’s decision-making space is becoming more complex.
In the coming period, the trajectory of international energy prices, U.S. domestic inflation data, and labor market changes will remain important variables influencing policy expectations.