Chicago Federal Reserve Bank President Austan Goolsbee stated in an interview with Chicago Public Television (WTTW) on Monday that the Federal Reserve is currently waiting and observing the impact of the Trump administration's new policies, and will only decide on the next steps after obtaining clearer economic data.

At present, there is a lot of uncertainty and dust is rising in the market. Before the Federal Reserve can continue to cut interest rates, we need to wait for these uncertain factors to gradually become clear. "- Austan Goolsbee

He pointed out that recent policy changes by the US government in areas such as tariffs, immigration, taxation, fiscal spending cuts, and federal employee layoffs may have complex impacts on economic growth, the job market, and inflation. Therefore, the Federal Reserve will not act rashly.

Trump's policies increase market uncertainty, making inflation path unpredictable

The series of economic policies recently announced by the Trump administration have increased market uncertainty. Among them, the most concerned ones include:

1. Tariff Policy: Trump plans to impose higher tariffs on imported goods, which could push up prices and affect supply chains.

2. Tax adjustment: The new round of tax policies may affect corporate investment and consumer spending.

3. Government spending cuts: Fiscal austerity may affect economic growth.

4. Immigration Policy: Strict immigration policies may exacerbate labor market tensions and push up wage costs.

5. Federal employee layoffs: Large scale streamlining of federal government human resources may affect public services and economic confidence.

These policies may have conflicting economic impacts, either pushing up inflation or suppressing demand, making it difficult for the Federal Reserve to determine the optimal direction of monetary policy.

The market expects the Federal Reserve to cut interest rates in July, but the policy path remains uncertain

Although the market generally believes that the Federal Reserve may initiate a rate cut in July, Goolsbee's statement indicates that there are still differences within the Fed regarding the timing and necessity of the rate cut.

At present, the market believes that if Trump's policies lead to a slowdown in economic growth, the Federal Reserve may accelerate the pace of interest rate cuts; But if inflationary pressures persist, the Federal Reserve may postpone its easing policy.

US dollar and gold market reaction: safe haven demand drives gold prices higher, US dollar trend constrained by policy uncertainty

Against the backdrop of the Federal Reserve remaining cautious and the Trump administration intensifying policy uncertainty, there has been a divergence trend between the US dollar and gold markets.

In terms of the US dollar: Due to Trump's tariff policies and fiscal cuts, which may have a negative impact on US economic growth, market risk aversion is rising, and the US dollar is receiving some support. However, at the same time, the market is also weighing the potential path of interest rate cuts by the Federal Reserve. If future data further deteriorates and the Federal Reserve releases clearer signals of easing, the US dollar may come under pressure.

In terms of gold: Due to the rising market risk aversion, the price of gold has approached historical highs. Investors' increased expectations of global economic uncertainty and the Federal Reserve's interest rate cuts have made gold a popular safe haven asset. In addition, if the Federal Reserve ultimately cuts interest rates and real interest rates decline, it will further increase the attractiveness of gold.

At present, the focus of the market is still on the economic data of the Federal Reserve in the coming months and the implementation of policies by the Trump administration, and the trends of the US dollar and gold may continue to be dominated by these factors.

Editor's viewpoint:

Goolsbee's statement indicates that the Federal Reserve is cautious about the current economic environment and will not rush to cut interest rates due to market expectations. Trump's policy mix has brought complex economic impacts, potentially pushing up inflation or suppressing growth, making the Federal Reserve's decisions even more difficult.

In the short term, the Federal Reserve will closely monitor economic data, particularly inflation, the job market, and consumer spending, in the coming months to decide whether to initiate interest rate cuts in July.