On May 6th, Salman Ahmed, head of global macro and strategy asset allocation at Fidelity, stated that his current fundamental forecast is that there will be no interest rate cuts this year. The U.S. economy remains quite strong, and inflation shows no signs of abating, especially in the service industry closely tied to demand. Market sentiment primarily depends on signals from the Federal Reserve. The Economic Projections Summary released by the Federal Reserve still indicates that inflation continues to move towards the 2% target, but given the current economic conditions, Fidelity International believes it may be difficult to reach the target by 2024. Additionally, in the current situation, it might not be easy for the Federal Reserve to raise interest rates again. What was the most important information released by the Federal Reserve at the May meeting? One major piece of information released by the Federal Reserve is that the current macroeconomic environment primarily depends on the trend of inflation. Demand remains strong, especially in labor demand. Federal Reserve Chairman Powell also acknowledged that inflation is persistent, hinting that the Federal Reserve is not yet prepared to cut interest rates. Therefore, the current sentiment is very different from the beginning of the year. At the beginning of the year, the general market prediction was for the economy to have a soft landing, with inflation gradually cooling off, and then the Federal Reserve starting to cut interest rates. However, the situation in May is clearly different. How will this affect monetary policy? Fidelity International's current fundamental forecast is that there will be no interest rate cuts this year. The economy remains quite strong, and inflation seems to show no signs of abating, especially in the service industry closely tied to demand. The Federal Reserve continues to delay cutting rates, and the 2% inflation target shows no progress. Despite this, in the current situation, it might not be easy for the Federal Reserve to raise interest rates again. If the Federal Reserve is currently unable to cut interest rates and unlikely to raise them, does this mean that maintaining interest rates unchanged will not be disadvantageous? The so-called "war of words" is taking effect. The market is trying to sync with the central bank's rhetoric, especially bond market participants are obedient to the Fed's words. Currently, the market predicts the Federal Reserve will cut rates about once in 2024, far fewer than the initial prediction of six rate cuts, and different from the prediction of two to three rate cuts when signs of rate cuts began to emerge at the end of last year. Will this general prediction change again? The evaluation of policy direction in the market has become so changeable, reflecting the market and the Federal Reserve's efforts to turn the tide. Forecasts are often overturned, partly due to the difficulty of predicting economic prospects, and partly due to constantly changing rhetoric. This also means that volatility will increase. Apart from volatility, what insights does the current stance of the Federal Reserve bring to the market? Due to the stark difference in inflation trends from the beginning of the year, real interest rates have been at relatively high levels for a long time, and this fund company believes that interest rates are at restrictive levels. However, the current situation is being driven by certain industries. The economy remains strong, consumption is still robust, and profits are supported. Therefore, individual stocks develop differently. This means that the profit cycle remains important. In the bond market, market sentiment continues to depend on the signals released by the Federal Reserve. The Economic Projections Summary released by the Federal Reserve still indicates that inflation continues to move towards the 2% target, but given the current economic conditions, Fidelity International believes it may be difficult to reach the target by 2024. In conclusion, as the macroeconomic environment becomes more volatile, this fund company predicts that volatility will increase, and different industries and companies will develop more individually.