[SMM Hydrogen Energy Flash] Recently, the Green Hydrogen Engineering Technology segment of Aerospace Engineering received a series of good news, successfully signing contracts for two major green hydrogen engineering projects. One is the water electrolysis hydrogen production project for the hydrogen refueling station of Zhongqing Energy Development (Shandong) Co., Ltd., and the other is the electrolytic hydrogen production unit project for the Inner Mongolia Baofeng green hydrogen-coupled coal-to-olefins project. Aerospace Engineering will provide a total of 16 sets of HTJSDJ-1000/1.6 alkaline electrolyzers for these two projects, as well as supporting post-processing systems, utility engineering equipment, and engineering design services. This signing marked Aerospace Engineering’s simultaneous breakthroughs in the two major fields of green transportation and green hydrogen chemical engineering.

Capacity side, according to incomplete statistics, the domestic alkaline electrolyzer market maintained at 43.77 GW, and the PEM electrolyzer market maintained at 2.7 GW, with no new capacity added for the time being. No offline public delivery information was available this week. Electrolyzer project updates: Inner Mongolia Huadian Huayang Hydrogen Energy Technology Co., Ltd.: The tender announcement for the survey and design services of the wind, solar, energy storage, and hydrogen components of the Inner Mongolia Huadian Damao Banner 1,000 MW wind-solar-hydrogen integration project was released. It is understood that the project is located in Damao Banner, Inner Mongolia Autonomous Region. The project involves the construction of 1,000 MW of new energy power generation, comprising 700 MW of wind power and 300 MW of PV power. It includes the installation of 70 wind turbine generators with a unit capacity of 10 MW, 614,770 pieces of 610Wp half-cell bifacial N-type modules, two 220 kV booster stations and access roads, and the construction of one 100 MW/200 MWh LFP battery ESS power station. Additionally, it involves the construction of 88 sets of 1,000 Nm³/h water electrolysis hydrogen production units and supporting equipment, with an annual hydrogen production capacity of 547 million Nm³. The project includes 25 hydrogen spherical tanks of 2,000 cubic meters each, providing a hydrogen storage capacity of 650,000 Nm³, and the construction of one 220 kV hydrogen production main step-down station and other facilities and equipment. CECEP Green Hydrogen Ammonia New Energy (Songyuan) Co., Ltd.: Good news came from the CECCE Songyuan Hydrogen Energy Industrial Park (Green Hydrogen-Ammonia-Methanol Integration) project. Since its official commissioning on December 16, 2025, the project's cumulative green ammonia production has exceeded 10,000 mt. Zhonggu (Otog Front Banner) New Energy Co., Ltd. : The land pre-examination and site selection opinion certificate for the CECEE Otog Front Banner Wind-Solar-Hydrogen Integration Project was approved by the Ordos Municipal Bureau of Natural Resources. It is understood that the project is located in Chengchuan Town and Aolezhaoqi Town, Otog Front Banner, Ordos City, with a total investment of 1.1527 billion yuan and a total land area of 5.7253 hectares. The construction content involves a new wind farm area, which includes 48 wind turbine generators with a unit capacity of 6.25 MW, a new 220 kV booster station, and an access road. China Coal Pingshuo Group Co., Ltd. : The tender for the alkaline electrolyzer package equipment and ancillary facilities for the Phase I 600,000 kW off-grid renewable energy hydrogen production project in the coal mining subsidence area of China Coal Pingshuo Group (Green Hydrogen Coupling with Coal Chemical Industry section) was released. It is understood that this tender includes 12 × 1,200 Nm³/h alkaline electrolyzers, 3 × 4,800 Nm³/h gas-liquid separation systems, 3 × 4,800 Nm³/h gas purification systems, along with supporting electrical instruments and spare parts, etc. The supply scope covers the design, manufacturing, factory acceptance, supply packaging, shipment, and delivery on board the truck at the site for all equipment. The project adopts a primary and auxiliary supply model. Main Supply: Includes 8 alkaline electrolyzers of 1,200 Nm³/h each, collectively supporting 2 sets of gas-liquid separation systems (4,800 Nm³/h each), 2 sets of gas purification systems (4,800 Nm³/h each), and other auxiliary facilities. Auxiliary Supply: Includes 4 alkaline electrolyzers of 1,200 Nm³/h each, collectively supporting 1 set of gas-liquid separation system (4,800 Nm³/h), 1 set of gas purification system (4,800 Nm³/h), and other auxiliary facilities. Sikage (Hebei) Hydrogen Energy Technology Co., Ltd.: The Sikage Hydrogen Energy Ecosystem Chain Project (Phase I) 8,000 mt electrolytic water hydrogen production project has been filed. The project's main entity is Sikage (Hebei) Hydrogen Energy Technology Co., Ltd. (established on December 29, 2025). Construction Location: Anci District, Langfang City, Hebei Province. Technical Route: Electrolytic water hydrogen production, including alkaline electrolytic water hydrogen production, proton exchange membrane electrolytic water hydrogen production, and 10 MW solid oxide electrolytic water hydrogen production. The annual hydrogen production capacity is 8,000 mt. Phase I will construct 200 MW wind power generation and ESS green electricity direct connection (off-grid type), achieving green hydrogen production from green electricity. Hebei Haite Weiye Petrochemical Co., Ltd.: The 2 million mt/year residue oil deep processing project has been filed. Construction Location: Huanghua City, Bohai New Area, Cangzhou City, Hebei Province. Total Investment: 1.594 billion yuan. It is reported that the project will construct a 2 million mt/year residue oil deep processing unit; a 1 million mt/year fuel oil desulfurization unit; a 20,000 Nm³/h dry gas hydrogen production unit; and a 100,000 mt/year sulphuric acid combined unit. Annual production includes liquefied petroleum gas (10,000 mt), isobutane (10,000 mt), propane (9,600 mt), etc. Hydrogen production is 30,000 Nm³/h. The hydrogen production route adopts the dry gas hydrogen production process. Yunnan Energy Research Institute Co., Ltd.: Announcement of winning candidates for the procurement of hydrogen production power supply equipment for the Key Technology Research Project on Control of Renewable Energy Electrolytic Water Hydrogen Production System. According to the announcement: The first winning candidate is Beijing Leidong Zhichuang Technology Co., Ltd., with a bid price of 760,000 yuan/tax included; the second candidate is Hubei Intelli Electric Co., Ltd., with a bid price of 650,000 yuan/tax included; the third candidate is Baoding Hongri Electric Co., Ltd., with a bid price of 799,000 yuan/tax included. It is reported that the project intends to procure 1 dry-type transformer, 1 IGBT rectifier power supply, 1 DC/DC converter, and 1 set of EMS energy management system, with the above power supplies integrated into one container. Fengqing Hydrogen Energy (Guizhou) Technology Co., Ltd. : Fengqing Hydrogen Energy (Guiyang Duyun Base) has launched the tender for civil construction of its Green Hydrogen Zero-Carbon Smart Park project, marking the official commencement of the project's implementation phase. The project is expected to achieve an annual production capacity of 10,400 mt of electrolytic water hydrogen production, with supporting construction including a green hydrogen plant, storage and transportation area, hydrogen energy detection center, and comprehensive energy station facilities. The hydrogen production plant is subdivided into five hydrogen production units: the first unit is equipped with 5 sets of 1,000 Nm³ electrolyzers, 5 sets of 1,000 Nm³/h gas-liquid separation devices, and 1 set of 5,000 Nm³/h purification device; the second and third units each contain 4 sets of 1,000 Nm³/h electrolyzers, 1 set of 4,000 Nm³/h gas-liquid separation device, and 1 set of 4,000 Nm³/h purification device; the fourth unit (as a backup) is configured with 6 sets of 1,000 Nm³/h electrolyzers, 6 sets of 1,000 Nm³/h gas-liquid separation devices, and 1 set of 6,000 Nm³/h purification device; the fifth unit adopts PEM technology with a capacity of 200 Nm³/h. Shandong Shankerongfa Pilot Base Co., Ltd. : Shankerongfa is advancing the procurement of cost consulting services for the 20,000 mt per year integrated green hydrogen-methanol demonstration project. The project is located in the Rizhao Haiyou Chemical Industry Park in Ju County, Rizhao City, Shandong Province. Its core construction involves a set of integrated green methanol production equipment with an annual capacity of 20,000 mt and its supporting facilities. This integrated green methanol production equipment covers multiple key production stages, including biomass grinding and gasification devices, syngas purification devices, green electricity electrolysis hydrogen production devices, methanol synthesis and distillation devices, etc. In the production process, the project uses biomass as the raw material, going through a series of steps including biomass gasification, syngas purification, green hydrogen production via green electricity, methanol synthesis, and distillation, ultimately producing green methanol. In terms of energy and raw material consumption, the project annually consumes approximately 100 million kWh of green electricity and about 30,000 mt of biomass. Anhui Yousai Technology Co., Ltd.: The Gucheng Economic Development Zone in Hengshui City signed a cooperation framework agreement with Anhui Yousai Technology Co., Ltd. for a 300 MW wind power hydrogen production project. Lanzhou New Area Nengke Ecological Development Co., Ltd.: The EPC general contracting winning candidates were announced for the Lanzhou New Area 100,000 mt/year biomass green methanol project (Phase I). The top winning candidate is the consortium led by Shanghai Electric Group Guokong Global Engineering Co., Ltd. (members: China Chemical Engineering Fourteenth Construction Co., Ltd., China Chemical Engineering Ninth Construction Co., Ltd., Shanxi Installation Group Co., Ltd.) with a bid of 959.06 million yuan. Section 2 was invalidated due to insufficient bidders (less than three). It is understood that the project's main production equipment includes biomass gasification to syngas units, shift and purification, compression, methanol synthesis, methanol distillation, 200 MW PV power generation (PV power generation and lines are not included in this tender) and water electrolysis for hydrogen production, etc. Policy Review 1. The Gansu Provincial Development and Reform Commission, the Gansu Provincial Department of Industry and Information Technology, and the Gansu Provincial Energy Bureau issued the "Gansu Province Zero-Carbon Park Construction Plan."The document pointed out that organically integrating solar, wind, geothermal, and air energy to directly supply buildings with energy, and relying on technologies such as wind-solar-hydrogen-storage microgrids, heat pumps, and molten salt thermal storage, will enhance the multi-energy conversion and mutual utilization of "electricity, heat, cooling, steam, and hydrogen" in industrial parks. It will vigorously develop emerging green and low-carbon industries, promote breakthroughs in core technologies for wind, solar, and ESS equipment, increase the localization rate of new energy equipment production, and build a "high-proportion green electricity-driven" new energy equipment industry chain. It will support the construction of projects for wind-solar coupled green hydrogen production and hydrogen energy storage industry chains, advance the integrated development of "green hydrogen production, storage, transportation, refueling, and utilization," and create a "wind-solar-hydrogen-methanol-ammonia" zero-carbon industry chain. It will guide the coordinated development of computing power projects and clean energy layout, increase the proportion of green electricity supply in data centers, and build a "computing power + green electricity" digital economy industry chain. 2. The Jilin Provincial Energy Bureau issued the "Implementation Plan for the Development and Construction of Green Electricity Direct Connection Projects in Jilin Province (Trial)" (Draft for Comments). The document indicated that new load projects can carry out green electricity direct connections, with key support for hydrogen-based green energy (green hydrogen, green hydrogen to green ammonia, green hydrogen to green methanol, green hydrogen to sustainable aviation fuel, etc.), steel metallurgy, computing power (data) centers, automotive manufacturing, and other industries. Electricity consumption projects that have not registered with grid companies (including expansion parts of existing loads), projects that have registered but whose supporting grid projects have not yet started construction, and existing projects agreed upon through consultation with grid companies are all regarded as new loads. In principle, new loads (including expansion parts of existing loads) and existing loads should not have direct electrical connections. 3. The European Commission approved a €4 billion electrolyzer special fund, providing a 30% subsidy on equipment costs for projects with an annual capacity of ≥500MW, and set a 2030 efficiency target for green hydrogen project electrolyzers at ≥60% (LHV basis). Corporate Updates CRRC Zhuzhou Institute Co., Ltd. : The green electricity hydrogen production equipment laboratory successfully obtained both CNAS and CMA certifications. As the first domestic institution to receive this dual certification, its water electrolysis hydrogen production system testing capacity reached 26MW, leading among similar certified institutions in China. Hyundai Motor Hydrogen Fuel Cell (Guangzhou) Co., Ltd. : The launch ceremony for the hydrogen energy bus delivery experience event, co-hosted with Skywell New Energy Automobile Group Co., Ltd., was held at the Guangbao Guangzhou Technology Park in Huangpu District, Guangzhou. Following the successful bidding for related projects in November and December last year, HTWO Guangzhou, in collaboration with Skywell Group, delivered 249 hydrogen fuel cell buses in bulk to the Guangzhou Bus Group. Cummins : Due to a significant deterioration in the market environment for hydrogen production technology, the US engine manufacturer Cummins announced that it will no longer engage in new electrolyzer commercial business. Mingyang Group : Mingyang Group, together with the Director of Vietnam's Xuan Qiao Group and Zhou Jiayi, Asia Pacific Regional General Manager of PowerChina International, gathered to reach a consensus on cooperation. The three parties will leverage the significant advantages of cross-border collaboration to jointly invest in and develop an energy project cluster. This cluster encompasses three core sectors: offshore wind power, green hydrogen and green ammonia, and zero-carbon industrial parks, with a substantial total scale, aiming to establish a new benchmark in the field of Sino-Vietnamese green transformation cooperation. Tianji Hydrogen Energy Technology (Beijing) Co., Ltd. : Lu Beiming, Chairman of Impex Group Co., Ltd., and Zhang Xiaolin, Deputy General Manager, visited the Changshu R&D and production site of Tianji Hydrogen Energy Technology (Beijing) Co., Ltd. for a field trip and exchange. Yuchai Xinlan (Jiangsu) Hydrogen Energy Technology Co., Ltd.: formally signed a strategic cooperation agreement with Hydrogen Green Power New Energy (Wuhan) Co., Ltd. The two parties will engage in in-depth cooperation regarding the full range of Yuchai hydrogen energy products, focusing on multi-scenario application development and market sales. Patent Applications 1. Shanghai Institute of Ceramics, Chinese Academy of Sciences (China) publicly disclosed patent CN2025110028, developing a ceramic-based anion exchange membrane with a laboratory test lifespan reaching 80,000 hours. 2. Johnson Matthey (UK) submitted patent WO2025109876, disclosing a Fe-Ni-Mo ternary non-precious metal catalyst formulation with activity close to that of platinum-based materials. Technology Footprints/Technical Specifications 1. The team of Liu Qingju from Yunnan University constructed a superwetting Pt/NF@CF graded heterojunction electrocatalyst for low-energy consumption, high-efficiency hydrogen production. 2. A team from Hunan Normal University and Central South University revealed the effects of compressive strain and oxygen vacancies on iridium oxide in proton exchange membrane water electrolyzers in Advanced Materials. 3. A relevant research team from the School of Electrical Engineering and the State Key Laboratory of Electrical Insulation and Electrical Materials at Xi'an Jiaotong University successfully developed a Ru/Ti3C2Ox@NF bifunctional electrocatalyst for seawater electrolysis. 4. The group standard "Technical Specification for Wind-Solar-Storage Green Electricity Coupled Electrolysis Hydrogen Production" (Number T/CIEP 0272—2025) was released and implemented by the China Industrial Association of Environmental Protection. Zhongneng Dayou Energy Technology Co., Ltd. successfully developed a 100kW-class PEM electrolyzer hydrogen production multi-field coupling test equipment. 5. GKN Powder Metallurgy announced the development of a new generation of high-performance, high-porosity, high-purity porous transport layer (HP-PTL) for proton exchange membrane (PEM) electrolysis.

Jon Faust, a former senior advisor to Fed Chairman Powell, recently stated that while it is still too early to determine how the Israel-Iran conflict will unfold, the situation in the Middle East represents a "significant uncertainty" for the US Fed and could potentially trigger a US economic recession . Jon Faust is a monetary economist with a PhD in Economics from the University of California, Berkeley. He is currently a researcher at the Center for Financial Economics at Johns Hopkins University. He has served as an internal advisor to three Fed Chairmen: Bernanke, Yellen, and Powell, and has worked at the US Fed for nearly 20 years. A sharp rise in oil prices could trigger an economic slowdown . In an interview with the media, Faust said, "If this conflict leads to a significant increase in oil prices and further impacts uncertainty and confidence, it could trigger an economic slowdown" . He pointed out, "Economic recessions typically occur when consumers and businesses are hit by some major shock. We may be seeing this unfold in the Middle East, and the likelihood of this scenario has slightly increased." Wall Street giant JPMorgan Chase warned in a report last week that under extreme geopolitical circumstances, particularly those involving Iran, oil prices could nearly double, reaching levels of $120-130 per barrel. Key points of this week's interest rate meeting The US Fed will hold a meeting on June 17-18 to set interest rate policies. The market widely expects the central bank to maintain interest rates unchanged for the fourth consecutive time. Since December last year, the US Fed has kept the benchmark interest rate in the range of 4.25% to 4.5%. Faust pointed out that the key point of this week's interest rate meeting is whether Powell will further clarify whether the future risk is more likely to be an outbreak of inflation or a weakening of the labour market . "This will provide some guidance for the policy direction this year," but so far, the US Fed has not shown a clear preference for either direction. Powell has already indicated that Trump's tariffs are highly likely to lead to an increase in US inflation or a slowdown in the labour market. In March this year, Fed officials expected two interest rate cuts this year. Fed observers are now focusing on whether the latest dot plot, to be released this week, will show policymakers lowering their forecasts for the number of interest rate cuts. Faust said he believes the so-called dot plot will not be very convincing. From the current perspective, the probabilities of the US Fed not cutting interest rates, cutting once, or cutting twice this year are equal . Not cutting interest rates is good news. US President Trump has recently increased pressure on Powell in recent days, urging him to cut interest rates promptly. In response, Faust said that while it's never good to be told by others that one's work is not up to par, these criticisms are "largely irrelevant" to the US Fed's policy path. Faust stated that although the US CPI inflation in May was lower than expected, it did not open the door for the US Fed to accelerate its actions. He pointed out that while the data has alleviated some concerns about the "worst-case scenario" for inflation, it is still too early to judge the impact of tariffs on inflation. He also noted that if the US Fed does not cut interest rates this year, it would be good news for everyone except the president, as it would mean that the labor market remains robust and the US economy has not weakened to the point where an interest rate cut is necessary. He also said that there is still significant uncertainty about how tariffs will ultimately be implemented and their impact, the data may not support the US Fed taking action in September, and he predicts a 50% likelihood of an interest rate cut in December.

On Tuesday (June 10), the three major US stock indices collectively rose, all closing at their highest levels in at least three months, with the S&P 500 and Nasdaq both recording a three-day winning streak. By the close, the Dow Jones Industrial Average rose 0.25% to 42,866.87 points; the S&P 500 rose 0.55% to 6,038.81 points; and the Nasdaq Composite Index rose 0.63% to 19,714.99 points. Traders are closely monitoring the progress of US-China negotiations. Previously, strong earnings reports from US publicly listed firms and a recent series of AI-related news had driven a rebound in tech stocks, boosting the overall US stock market. Jay Woods, Chief Global Strategist at Freedom Capital Markets, said, "Technically, the stock market is performing well, breaking through key levels and getting back on track. At the beginning of the week, the index was slightly above the downtrend line and is now rebounding towards its year-to-date high." Woods added, "This rebound looks similar to many tech stocks trying to return to their all-time highs. The good news is that even the weaker sectors seem to have found a soft landing spot, and from a risk/reward perspective, it's a good entry point now." The US CPI report is scheduled to be released before the market opens on Wednesday, with expectations that inflation may rise slightly. A survey by 22V Research showed that 42% of investors believe the market's reaction to the CPI data will be "risk-on," the first time the market has leaned towards risk-taking since last August. Mark Malek, Chief Investment Officer at Siebert Financial, said, "The US Fed is worried that the true inflationary effects have not yet materialized. Given the current complex tariff situation, we expect to see initial signs of tariff-driven inflation in goods such as cars, clothing, and food." Performance of Popular Stocks Most large-cap tech stocks rose, with Nvidia (by market cap) up 0.93%, reclaiming its position as the world's largest company by market cap; Microsoft down 0.39%, Apple up 0.61%, Amazon up 0.29%, Alphabet Class C up 1.34%, Meta up 1.2%, and Broadcom up 0.14%. Tesla rose 5.67%, and after a sharp rebound over three consecutive days, its market cap returned to above $1 trillion. Chip stocks generally strengthened, with the Philadelphia Semiconductor Index rising 2.06%. Among the 30 constituent stocks, only Marvell Technology (-0.43%) declined. Intel rose 7.81%, its largest single-day gain in two months, closing at $22.08, a level not seen since May 13. Novo Nordisk rose 5.13%. According to media reports citing sources, activist hedge fund Parvus Asset Management is increasing its stake in Novo Nordisk. "Stablecoin first stock" Circle fell by 8.1%, after surging over 270% in the three days since its listing. Among US-listed Chinese stocks, the Nasdaq Golden Dragon China Index rose by 0.3%. The performance of popular US-listed Chinese stocks was mixed, with Legend Biotech up 8.22%, NIO up 5.83%, New Oriental up 2.6%, XPeng Motors up 1.59%, Pinduoduo up 0.76%, and Alibaba up 0.33%. On the other hand, CHAGEE fell by 6.44%, Pony.ai fell by 5.29%, Li Auto fell by 3.57%, Baidu fell by 1.32%, Tencent Music fell by 0.92%, and JD.com fell by 0.44%. Corporate News [Starbucks Launches Microsoft Azure OpenAI Assistant for Baristas] Starbucks has introduced a generative AI assistant created using Microsoft Azure's OpenAI platform. The technology will be rolled out to stores in the US and Canada in fiscal year 2026. As part of its turnaround plan, Starbucks has been working to streamline baristas' work and speed up service in its cafes. [OpenAI Reportedly Plans to Partner with Google Cloud for Cloud Computing] According to media reports, sources familiar with the matter revealed that OpenAI plans to collaborate with Alphabet's Google Cloud to meet its growing computing needs. The two sides began discussions several months ago and finalised the agreement in May. This partnership not only demonstrates OpenAI's need for a diversified supply chain but also symbolises its gradual reduction of reliance on its major supporter, Microsoft. [Morgan Stanley CEO: Equity Capital Market Activity Expected to Gradually Rebound] The CEO of Morgan Stanley stated that there has been a recent rebound in deal announcements, and equity capital market activity is expected to gradually rebound, with recent deals performing well. He also expects a strong finish to the current quarter, with a stable deal pipeline showing growth in certain regions.

The State Council Information Office held a press conference at 10 a.m. today. Xiao Weiming, Deputy Secretary General of the National Development and Reform Commission (NDRC), along with relevant officials from the Ministry of Education, the Ministry of Civil Affairs, the Ministry of Finance, the Ministry of Human Resources and Social Security, and the National Health Commission, introduced policies on further safeguarding and improving people's livelihoods, and answered questions from journalists. Ministry of Finance: Accelerating the Establishment and Implementation of a Childcare Subsidy System Ge Zhihao, head of the Social Security Department of the Ministry of Finance, stated at the State Council Information Office press conference that, in terms of services for the elderly and children, the Ministry of Finance actively collaborates with relevant departments to improve the elderly care and childcare service system, promotes community-supported home-based elderly care services, strengthens care services for the disabled elderly, facilitates the high-quality development of inclusive childcare services, and accelerates the establishment and implementation of a childcare subsidy system. Relevant work is being expedited to better meet the people's service needs for the elderly and children. This year, the national budgetary allocations for education, social security, and employment expenditures are both close to 4.5 trillion yuan. At the conference, Ge Zhihao introduced that people's livelihoods are closely related to the vital interests of the people. In 2025, fiscal investment in people's livelihoods will be further increased. The national budgetary allocations for education, social security, and employment expenditures are both close to 4.5 trillion yuan, with increases of 6.1% and 5.9%, respectively. Expenditures on health and other areas will also maintain relatively high growth rates, aiming to strengthen the "safety net" for people's livelihoods and continuously enhance the people's sense of gain, happiness, and security. Implementing National Pooling and Adjustment of Pension Insurance, Benefiting Over 300 Million Elderly People Ge Zhihao stated that the national monthly minimum basic pension standard for urban and rural residents borne by the state finance will be increased by another 20 yuan, and the basic pensions for retirees will also be appropriately raised. To ensure the timely and full payment of these benefits, the central finance will further increase subsidies this year and implement national pooling and adjustment of pension insurance, benefiting over 300 million elderly people. NDRC Deputy Secretary General: The Central Budgetary Investment Scale Supporting Social Undertakings This Year is Expected to Increase by Over 30% Compared to the End of the 13th Five-Year Plan Period Xiao Weiming, Deputy Secretary General of the National Development and Reform Commission (NDRC), stated at the State Council Information Office press conference that the central budgetary investment scale supporting social undertakings this year is expected to increase by over 30% compared to the end of the 13th Five-Year Plan period. While organizing and implementing "hard investment" projects, the NDRC will also accelerate the introduction and implementation of measures for "soft construction," improve the dual-wheel drive of "projects + policies," promote the replacement of mechanisms through investment, and strive to fully realize the benefits of addressing weaknesses, expanding domestic demand, and benefiting people's livelihoods. A number of major strategic tasks, policy initiatives, and engineering projects in the field of people's livelihood will be proposed. Xiao Weiming stated that the National Development and Reform Commission (NDRC) will implement the decisions and arrangements of the CPC Central Committee. Based on thorough surveys, it will collaborate with various sectors to formulate the "15th Five-Year Plan," proposing a number of major strategic tasks, policy initiatives, and engineering projects in the field of people's livelihood, and integrating the construction of people's livelihood into the national development blueprint for the "15th Five-Year Plan." Enhance the overall coordination and systematic integration of people's livelihood policies, and improve the policy coordination mechanism. Xiao Weiming noted that people's livelihood work involves numerous aspects. Strengthening overall coordination and preventing policy fragmentation are essential to achieving a unified approach and joint efforts in advancing this work. The most prominent feature of the "Opinions" is the enhancement of the overall coordination and systematic integration of people's livelihood policies. The main implementing departments of the "Opinions" will strengthen interdepartmental coordination in three aspects: first, strengthening the guiding role of development plans and enhancing the strategic orientation of national development plans; second, improving the policy coordination mechanism and leveraging the coordinating role of comprehensive departments; third, balancing "hard investments" and "soft constructions." Focus on key issues in people's livelihood and propose targeted policies to ensure that the general public feels a tangible sense of gain. Xiao Weiming stated that the "Opinions on Further Ensuring and Improving People's Livelihood and Addressing Urgent Needs and Concerns of the Masses" propose not only enhancing fairness and balance in institutional construction such as strengthening social security and providing basic public services but also focusing on key issues in people's livelihood, such as ensuring access to quality education, healthcare, affordable elderly care and childcare services, and diversified social services. Targeted policy initiatives will be proposed to ensure that the general public feels a tangible sense of gain. Xiao Weiming cited examples, noting that to address the issue of increasing income for low-income rural populations, the "Opinions" clearly propose implementing actions to enhance skills and increase income for low-income rural populations. This involves promoting industrial development to facilitate employment, improving skills, strengthening development-oriented assistance, and helping low-income populations achieve prosperity through their own efforts. To ensure that basic pension insurance benefits urban and rural residents and improve the level of protection, the "Opinions" clearly propose optimizing the contribution tier settings for basic pension insurance for urban and rural residents, reasonably determining the level of contribution subsidies, and appropriately increasing the flexibility of contributions. Additionally, the "Opinions" propose orderly promoting the cross-provincial pooling of personal accounts in the basic medical insurance for employees, allowing more insured employees to transfer funds across provinces to relatives participating in basic medical insurance. Ministry of Education: Gradually achieve full coverage of standardized construction of compulsory education schools within about five years. Guo Peng, Director-General of the Department of Development Planning at the Ministry of Education, stated that in the field of basic education, the Ministry of Education will further improve the mechanism for coordinating and allocating educational resources in response to demographic changes, focusing on three main aspects. The first is "expanding the total capacity." We will focus on the prominent issue of insufficient high school places and build, renovate, or expand over 1,000 high-quality regular high schools. The second is "improving quality." We will gradually achieve full coverage of standardized construction of compulsory education schools within around five years. By implementing the "Yunnan Zhenxing Lead Industry Co., Ltd. {{Company}} Plan for County High Schools," we will focus on improving the basic schooling conditions and enhancing the educational standards of regular high schools in counties. The third is "promoting equity." We will reasonably plan the enrollment scales of regular high schools and secondary vocational schools, accelerate the expansion of the proportion of high-quality regular high school enrollment indicators allocated to schools, primarily distributing them to junior high schools within the region based on student numbers, and giving priority to rural and other schools. We will promote the enjoyment of equal rights for eligible agricultural migrant populations as those with household registration in the destination areas. We will coordinate the use of central budgetary investments and ultra-long-term special treasury bonds to support universities in continuously improving their schooling conditions. Guo Peng stated that in the field of higher education, this year's undergraduate enrollment expansion in "Double First-Class" universities is good news for students who have just taken the college entrance examination. Next, we will focus on promoting the improvement and expansion of higher education in three aspects. The first is "improving conditions." We will coordinate the use of central budgetary investments and ultra-long-term special treasury bonds to support universities in continuously improving their schooling conditions. The second is "optimizing structure." We will promote the appropriate allocation of new higher education resources to populous provinces in central and western China. We will support the establishment of new-type research universities and high-level Sino-foreign cooperative education institutions. The third is "integrating industry and education." We will guide universities to improve the mechanism for adjusting academic disciplines and majors based on the needs of economic and social development, strengthen practical training in industries and enterprises, and enhance students' employability and entrepreneurial capabilities. Ministry of Civil Affairs: Actively Promoting the Introduction of the Social Assistance Law to Provide Legal Support for Basic Livelihood Security Zhang Wei, head of the Social Assistance Department of the Ministry of Civil Affairs, stated at a State Council Information Office press conference that strengthening support for low-income groups is an important measure to ensure and improve basic livelihoods and address the urgent needs and concerns of people in difficulty. Next, the Ministry of Civil Affairs will further improve the social assistance system and mechanisms, strengthen policy implementation, and promote the fairer, more balanced, and sustainable implementation of various assistance and support measures for people in difficulty. Firstly, we will further expand the monitoring scope and accelerate the construction of a national dynamic monitoring information platform for low-income populations. At the same time, we will actively promote the introduction of the Social Assistance Law to provide strong legal support for basic livelihood security. Secondly, we will further strengthen digital empowerment, emphasize targeted assistance, and formulate methods for identifying low-income populations and verifying the economic status of low-income families. We will strengthen the sharing and comparison of social assistance information. Finally, the Ministry of Civil Affairs will further strengthen organizational coordination, give full play to the role of coordination mechanisms such as the joint meetings of social assistance work leading groups at all levels, strengthen the connection between government assistance and charitable support, and form the greatest possible assistance synergy. Ministry of Human Resources and Social Security: Lifting Residency Restrictions for Flexible Workers to Participate in Social Insurance in Their Place of Employment At a press conference, Zhai Yanli, Director of the Social Insurance Administration Center of the Ministry of Human Resources and Social Security, stated that they will continue to deepen reforms in accordance with the requirements of the "Opinions," promote high-quality expansion of social insurance coverage, and focus on flexible workers, migrant workers, individuals in new forms of employment, and college graduates when formulating social insurance policies that better suit new employment patterns and income characteristics. They will implement the lifting of residency restrictions for flexible workers to participate in social insurance in their place of employment, adopt more flexible methods for social insurance contributions, and actively guide eligible flexible workers to participate in enterprise employee pension insurance in their place of employment or their place of household registration. They will steadily and orderly expand the pilot program for occupational injury insurance for individuals in new forms of employment, gradually expanding the pilot scope by improving policies such as premium rates. National Health Commission: Increasing the Supply of Inclusive Childcare Services Through Multiple Channels At a State Council Information Office press conference, Zhuang Ning, Director of the Department of Planning, Development, and Informatization of the National Health Commission, stated that in the next step, they will continue to adhere to the people-centered development philosophy and increase the supply of inclusive childcare services through multiple channels in three aspects. In terms of accelerating the construction of an inclusive childcare service system, they will build a "1+N" childcare service system with a comprehensive childcare service center as the hub and a network of childcare institutions, community-embedded childcare, kindergarten-based childcare, employer-provided childcare, and family childcare points to enhance inclusive childcare services. In terms of vigorously developing integrated childcare and early childhood education services, they will summarize local experiences and practices, coordinate resources for childcare services for children aged 0-6, improve supporting measures, support eligible kindergartens to offer childcare classes, and promote the coordinated and sustainable development of preschool education and childcare services. In terms of effectively improving the quality of childcare services, they will promote the support of medical institutions for the development of childcare services, guide various regions to advance the standardized and professional development of childcare services through measures such as renovating facilities and equipment of childcare service institutions, conducting quality assessments, providing personnel training, and implementing safety inspections, while ensuring safety and health standards.

The US dollar is currently in a period of volatility, and many European Central Bank (ECB) officials are calling for an opportunity to enhance the international status of the euro. For instance, Isabel Schnabel, a member of the ECB's Executive Board, believes that as investors turn to Europe, it is a favorable time to strengthen the global position of the euro. So far this year, investors have been selling off the US dollar, and data shows that the dollar has also been depreciating against other major currencies. At the 31st Dubrovnik Economic Conference held last Saturday (June 7), Schnabel stated that there is currently a certain opportunity to increase the international role of the euro. She added that there are signs that investors are looking to the European continent to diversify their portfolios, which she described as a "positive confidence effect." Prior to this, European policymakers, including ECB President Christine Lagarde, have also indicated that officials are exploring ways to turn the US's attacks on global trade into an advantage for the eurozone. It is worth mentioning that Wall Street investment bank Goldman Sachs has recently expressed optimism about the future trend of the euro. In a report, Goldman Sachs strategists wrote that the US non-farm payrolls data released last Friday aligns with the slowdown trend in the real economy and should weigh on the US dollar for some time. Strategists including Kamakshya Trivedi wrote in a June 6 report, "The depreciation of the US dollar may be entering a new phase, and we still believe this situation will continue." Goldman Sachs has also raised its three-month forecast for the euro-dollar exchange rate to 1.17, its six-month forecast to 1.20, and its 12-month forecast to 1.25, citing the slowdown in US economic activity and a shift in global investors' interests. Previously, the institution's three-month forecast for this currency pair was 1.12, its six-month forecast was 1.15, and its 12-month forecast was 1.20. Is the euro set for a "golden moment"? Last Saturday, Schnabel also mentioned that talks with financial market participants showed that investors are increasingly interested in diversifying their investments and are turning their attention to Europe, "which is another piece of good news." She also pointed out that another reason for the high profile of European markets is the expected increase in public spending on defense and infrastructure in Europe. "In the case of Germany, it has significant fiscal space, and investors are actually very positive to see that Germany has finally abandoned austerity policies." Schnabel emphasized that more investment in Europe has eased financial conditions in the region, "which is another very positive impact."She also proposed the need for a large European bond market to strengthen the euro's global standing and suggested considering joint bond issuance to fund European public goods. In recent weeks, numerous ECB officials have intensively voiced calls to accelerate the enhancement of the euro's international status. At month-end May, President Lagarde stated that Trump's unpredictable policies presented a "golden opportunity" to bolster the euro's role, urging Europe to leverage this moment to claim more financial privileges currently exclusive to the dollar. She noted these shifts "open the door for a 'global euro moment'," emphasizing that politicians should seize this opportunity. Spanish central bank governor Jose Luis Escriva also stressed during a June 8 interview, "The dollar's dominance as the international reserve currency appears to be peaking." Escriva pointed out, "The euro has potential to rival the dollar, particularly if the eurozone maintains macro-economic and institutional stability. With a robust economy and trade volumes surpassing the US, Europe could strengthen the euro's role as a reserve and reference currency in international trade still dominated by the dollar." Bundesbank President Joachim Nagel echoed similar views but cautioned against excessive erosion of dollar influence. Nagel noted on Sunday, "From Europe's perspective, we need to strengthen the euro and make the continent more attractive to foreign investors. Of course, we must also closely monitor the dollar and hope it remains stable."

On Monday local time, a survey released by the New York Fed showed that as the tariff war cooled down, US consumers' concerns about inflation eased in May. Specifically, the Survey of Consumer Expectations in May indicated that the one-year inflation expectation was 3.2%, a decrease of 0.4 percentage points from a month earlier; the three-year inflation expectation fell from 3.2% in April to 3%; and the five-year inflation expectation dropped from 2.7% to 2.6%. Although these figures remain above the US Fed's annual inflation target of 2%, the changes in these indicators are moving in a positive direction and reflect a shift in the fear sentiment that had previously arisen from Trump's wielding of the tariff stick. In early April, Trump announced a 10% baseline tariff on all US imports and a series of so-called reciprocal tariffs on dozens of trading partners. Faced with severe market volatility in financial markets, he then announced a postponement of the reciprocal tariff measures. US Fed officials closely monitor the trend of inflation expectations, as they believe that the public's expectations about inflation can have a strong impact on current levels. If people expect higher prices in the future, they may increase spending now and even demand higher wages. The Fed has repeatedly stated that the relative stability of long-term expectations is one reason they believe inflation will return to the target level. Compared with the survey results from the University of Michigan and the Conference Board, the New York Fed's survey results are less volatile. This survey brought some good news to the White House at a time when US government officials are trying to ease concerns about tariff-induced inflation. Kevin Hassett, director of the White House National Economic Council, said on Monday that, based on every inflation indicator, the decline exceeded the levels seen in more than four years. "Despite the increase in tariff revenue, inflation is declining, which contradicts what others have been saying but aligns closely with what we have been saying." However, economists generally expect that high tariffs will lead to higher prices for consumers while dampening employment and economic growth. The main question is whether these price increases will be one-time events or have lasting impacts. Nick Timiraos, known as the "Fed Whisperer," commented that the New York Fed's inflation expectations for May unexpectedly declined, although uncertainty about medium-term inflation expectations remains high. In addition, the survey also showed that consumers believe there is a lower likelihood of unemployment rising next year and that they will have more opportunities to find work if they themselves become unemployed. In May, consumers became more optimistic about their personal financial situations, including a slight improvement in access to credit and a decrease in the likelihood of debt delinquency. However, a report on Monday revealed that one pain point for consumers still persists: grocery store operations. Consumers expect food prices to rise by 0.4 percentage points to 5.5% next year, the highest level since October 2023. Meanwhile, the expected increase in home prices in May was 3%, down from 3.3% in April.

Last Friday, Eastern Time, the latest non-farm payrolls report released by the US Bureau of Labor Statistics brought relief to Wall Street. The report showed that the seasonally adjusted non-farm payrolls in the US in May reached 139,000. Although this marked the lowest level since February, it was still higher than the market expectation of 130,000. Meanwhile, the US unemployment rate remained at 4.2% for the third consecutive month, which also eased concerns that the labour market was beginning to slow down significantly. However, US economists warned that the impact of Trump's tariffs on US employment may not truly manifest until July or August. Therefore, it may be too early for Wall Street and the US Fed to let their guard down. It's too early to relax now. As early as last Thursday, Eastern Time, Joe Brusuelas, chief economist at RSM, wrote in his report: "We believe it is too early for the (May non-farm) employment report to reflect the negative impact of trade policies. This impact will only be fully reflected in the employment reports for July and August ." Although US President Trump announced global tariff policies as early as on "Liberation Day" (April 2), due to the frequent changes in Trump's trade policies and the delays caused by economic transmission, the far-reaching impact of tariffs on the US economy and job market may not be fully felt until midsummer. Joe Brusuelas also stated that the current US job market has already shown an overall cooling trend, initially reflecting the impact of tariffs. US business owners may be waiting and seeing. In fact, "resilience" was once a key word for the US economy during the COVID-19 pandemic. This characteristic also applies in the current phase of trade conflicts. Similar to the COVID-19 period, the current US economy shows a trend of maintaining low layoff rates and stable business activity. However, with the implementation of tariffs, economic data for May has already begun to show signs of a slowdown in US hiring and manufacturing output data. Although Wall Street analysts expect the US labour market not to collapse, the labour market may also increasingly exhibit a state of "hesitation" and "stagnation" —because business employers are increasingly realizing that the best strategy in this period of uncertainty is to wait and see—that is, neither to lay off employees on a large scale nor to increase hiring. This trend has also been clearly reflected in the non-farm payrolls data: although the unemployment rate has not surged significantly, the growth in non-farm payrolls has declined month by month. This is actually not good news for the US economy—although the labour market will not collapse, the prolonged hiring freeze by companies will also have a negative impact on the economy. "We are approaching an inflection point, and concerns about stagflation may penetrate into a broader market level," said Chris Zaccarelli, Chief Investment Officer of Northlight Asset Management. "We are seeing a decline in productivity, a slowdown in economic growth, and at the same time, signs of rising (or sticky) inflation."

Amid the spectacle of Trump and Musk's public feud, many Wall Street traders have not forgotten that there is another major macroeconomic event on the horizon tonight: the US May non-farm payrolls data... According to the schedule, the US Bureau of Labor Statistics will release the May non-farm payrolls data at 8:30 PM Beijing time tonight. Over the past few months, US economic data, particularly the "hard data," has consistently demonstrated resilience. Despite ongoing concerns about policy uncertainty, the number of layoffs has remained low, and business activity has remained stable. However, many industry insiders are concerned that this situation may soon change. With the implementation of widespread tariff measures, multiple sets of economic data released by the US government this week have gradually shown signs of a slowdown. This has led many traders to place increasing importance on tonight's May non-farm payrolls report, attempting to identify signs of weakness in the labour market to gauge the timing of a US Fed interest rate cut. So, what are the market expectations for tonight's non-farm payrolls? What should investors be aware of in advance? And how will the US financial markets perform tonight? According to the median forecasts compiled by industry economists, the number of new non-farm jobs added in May is expected to slow significantly to 125,000 from the previous month, while the unemployment rate is expected to remain unchanged at 4.2%, and wage growth is also expected to slow slightly on a YoY basis. Below are the latest median forecasts from Wall Street for the main indicators and key sub-indicators of the May non-farm payrolls compared with the previous month: The US seasonally adjusted non-farm payrolls for May are expected to increase by 125,000, compared with the previous value of 177,000; The US unemployment rate for May is expected to be 4.2%, unchanged from the previous value of 4.2%; The US labour force participation rate for May is expected to be 62.6%, unchanged from the previous value of 62.6%; The US average hourly earnings for May are expected to increase by 3.7% YoY, compared with the previous value of 3.8%; The US average hourly earnings for May are expected to increase by 0.3% MoM, compared with the previous value of 0.2%. In contrast to the above mainstream forecasts, CLS has also compiled some key points to note for tonight's non-farm payrolls: ① There are significant differences in investment banks' forecasts for the non-farm payrolls The estimates for tonight's non-farm payrolls range from a high of +190,000 to a low of +75,000; ② "Whisper numbers" circulating in the market have declined as the data release date approaches Whisper numbers are unofficial and unpublished forecasts circulating among Wall Street professionals, often disclosed to VIP clients of brokerage firms. Currently, the whisper number forecast for non-farm payrolls has dropped to 110,000 people. ③ A series of leading indicators ahead of the non-farm payrolls data have generally underperformed Part of the reason for the decline in the aforementioned "whisper number" is clearly the poor performance of a series of leading indicators for non-farm payrolls released earlier this week, ahead of tonight's non-farm payrolls night. In particular, the ADP employment data on Wednesday and the initial jobless claims data on Thursday were extremely dismal. According to a report released by US payroll processing company ADP on Wednesday, as signs of weakness emerged in the labour market, job growth in the US private sector nearly stalled in May, hitting the lowest level in more than two years—only 37,000 jobs were added that month, far below the market expectation of 110,000. A discrepancy of as much as 5 Sigmas between the reported figure and market expectations is extremely rare. This also marked the lowest monthly employment figure released by ADP since March 2023. Data released by the US Department of Labor on Thursday showed that, for the week ending May 31, seasonally adjusted initial jobless claims rose by 8,000 to 247,000, higher than the market expectation of 235,000 and reaching the highest level since 2025. In addition, the employment sub-indices in the ISM surveys presented a mixed picture overall. Although the ISM manufacturing employment index increased slightly this month, it remained below the 50 mark, while the employment situation in the services sector improved, with job growth returning to expansion territory. ④ Tonight's US Department of Labor report will correct many data points from the April non-farm payrolls report The US Bureau of Labor Statistics (BLS) had previously issued a notice on its official website on Tuesday, indicating that it would correct "minor errors" in many data points from the April non-farm payrolls report when releasing the May non-farm employment report on Friday. The notice stated, "Due to minor errors in weights resulting from the introduction of a redesigned Current Population Survey (CPS) sample, some estimates for April 2025 will be revised on June 6, 2025." However, while past non-farm payrolls data will be corrected, major labour market sub-indices such as the unemployment rate, labour force participation rate, and employment-to-population ratio will remain unaffected. ⑤ Expectations for an interest rate cut ahead of the non-farm payrolls data have increased somewhat As reported by Caixin earlier this morning, due to the poor performance of multiple sets of US economic data on Wednesday, market expectations for an interest rate cut have rapidly increased. Currently, the market has fully priced in the expectation of two interest rate cuts by the US Fed this year. Of course, this expectation for an interest rate cut is actually at a rather sensitive juncture. The well-known financial blog website Zerohedge has analyzed that any upside surprise in non-farm payrolls data could lead to another market reversal—no longer expecting two interest rate cuts within the year, while any downside surprise could trigger concerns about an economic recession and impact risk assets. ⑥ How will non-farm payrolls data affect financial markets? In the forward-looking forecasts of Goldman Sachs and JPMorgan Chase teams, both generally expect that the better the non-farm payrolls data is tonight, the more favorable it will be for the market; on the other end, JPMorgan Chase's Andrew Tyler team believes that if the data falls below 100,000, it could potentially end the current bull market in U.S. stocks... Below are the five scenarios forecasted by the JPMorgan Chase team: ① Non-farm payrolls exceed 170,000: This is the first tail-risk scenario. A figure of 170,000 can to some extent be considered as hiring demand driven by demand boost or seasonal contingencies. If employment further reaches 250,000 people, it may be seen as the economy reaccelerating, with the trade war at least not having a substantial impact on the labour market, thereby forcing the bond market to reprice for higher yields and eliminating the one or two interest rate cuts that the market has already priced in. The probability of this scenario occurring tonight is 5%, and the S&P 500 index will rise by 0.5%-2.5% as a result. ② Non-farm payrolls are between 140,000 and 170,000: This would be the economy's "Goldilocks scenario." The probability of this scenario occurring tonight is 25%, and the S&P 500 index will rise by 1.5%-2% as a result. ③ Non-farm payrolls are between 115,000 and 135,000: This is also the current mainstream market expectation. Even at the lower end of this range (115,000), it would be sufficient to sustain the current market rally, but attention should be paid to the unemployment rate trend. If the unemployment rate rises to 4.3%, the intraday gain of the S&P 500 index may converge to the lower end of the estimate for this scenario (0.25%), while also indicating that the unemployment rate may accelerate its climb at a rate of 0.1-0.2 percentage points per month, potentially worsening after the full impact of the trade war becomes apparent. However, it should be noted that given the almost weekly changes in trade policies, any forecast is subject to uncertainty. The probability of this scenario occurring tonight is 40%, and the S&P 500 index will rise by 0.25%-1% as a result. ④ Non-farm payrolls are between 100,000 and 115,000: When non-farm payrolls data falls below 100,000, the market will face a real test—most people will view it as an inevitable signal of a recession. The unemployment rate and wage growth also affect the outcome in this range—the worst-case scenario in this range is that the data only reaches 100,000, the unemployment rate rises to 4.3% or 4.4%, and wages decline. Overall, there is a 25% probability of this scenario occurring tonight, with the S&P 500 index expected to move between a 1.25% decline and a 0.5% increase. ⑤ Non-farm payrolls data is below 100,000. This is the second tail-risk scenario, which could potentially end the current US bull market. Economic recessions are a typical cause of bull market endings, and data below 100,000 would put the entire market on "recession alert." There is a 5% probability of this scenario occurring tonight, with the S&P 500 index expected to decline by 2%-3%. JPMorgan Chase concluded, "Current market risks remain skewed to the upside, as we believe the market is in a 'good news is good news' macro environment. Positioning suggests investors are net short, expecting a trade war to eventually lead to an economic downturn; some believe the US is heading toward a recession or even stagflation, while the US Fed will remain on hold. Additionally, if the deficit-expanding tax/budget bill is passed, it will deplete the US fiscal reserves to combat a recession or stagflation. However, our tactical view is more measured, as we believe economic resilience will persist in the near term." Coincidentally, Goldman Sachs currently makes a similar "good data is good news, bad data is bad news" prediction regarding the impact of tonight's non-farm payrolls data on US stocks. Goldman Sachs itself forecasts 110,000 for tonight's non-farm payrolls. Data significantly below expectations could lead to a 1.5% decline in the S&P 500 index, while data significantly exceeding expectations could drive US stocks up by over 1%.

Judging from the recent statements of an increasing number of Fed officials, a divergence is emerging within the US Fed, as officials attempt to determine whether the inflation caused by US President Trump's tariff measures will persist for a longer period. Against this backdrop, they hold differing views on whether interest rates should remain stable for an extended period or whether they can cut interest rates with relative ease later this year... Some policymakers advocate treating the impact of tariffs as "transitory" and thus "ignoring" it to a certain extent, a stance that would open the door to interest rate cuts. However, many officials on the Federal Open Market Committee (FOMC), which sets interest rates, believe that the inflation triggered by tariffs may become more persistent. Dovish camp Christopher Waller, a Fed governor who had taken a hawkish stance in the past few years, now undoubtedly stands firmly in the aforementioned first, "more dovish" camp. On Monday, he once again elaborated on why any impact of Trump's tariffs on inflation may not be long-lasting... In a speech in Seoul, South Korea, on the same day, Waller said, "Given my belief that any tariff-induced inflation will not persist and that inflation expectations are stable, I support ignoring the near-term impact of tariffs on inflation when setting policy interest rates." This statement can be said to be largely in line with the White House's view that any tariff-induced price increases will be short-lived. Trump himself has repeatedly called on Powell and the Fed to cut interest rates for this reason. Waller said that the US's "strong" labour market and recent progress in achieving the Fed's 2% inflation target provide policymakers with time to observe the evolution of trade negotiations. However, he also pointed out, "Assuming that actual tariff rates remain stable near the modest tariff scenario I envision, core inflation continues to move towards our 2% target, and the labour market remains robust, I am willing to support an interest rate cut later this year based on 'good news'." Chicago Fed President Austan Goolsbee also said on Monday that tariff uncertainty is creating some of what he called "dust in the air," but "I still think that beneath that, we are basically on the path to interest rate cuts." "If we can get through this bumpy period, the prospects for achieving our dual mandate still look pretty good to me," he added. Hawkish camp However, in contrast to the aforementioned "dovish camp," other members of the Fed, including Minneapolis Fed President Neel Kashkari and Dallas Fed President Lorie Logan, are currently more explicitly advocating for maintaining stable interest rates. Last week, Kashkari stated that he believed trade negotiations could take months or even years to resolve, and with retaliatory responses from US trading partners, tariff increases might lead to a tit-for-tat situation. Therefore, he hoped that the US Fed could maintain stable interest rates until there was more clarity on the tariff path and its impact on prices. "Given my strong emphasis on safeguarding long-term inflation expectations, I find this argument more compelling," he added. In addition, Dallas Fed President Logan also sent a subtle message last week about maintaining stable interest rates amid calls from Trump for interest rate cuts. She stated that interest rates were now in a "good place" and that it might take "quite some time to know whether the balance of risks is shifting in one direction or the other." She added that the impact of interest rate changes takes time to materialize, and to maintain balance, the US Fed needs to consider the direction of the economy, not just its current position. "In the short term, the central bank can always increase employment by cutting interest rates. People might enjoy a period of relief. But over time, excessive interest rate cuts will trigger spiral inflation." On Monday, she reiterated in Dallas that the US Fed faces risks in both aspects of its dual mandate of stable prices and full employment. "Monetary policy is indeed in a favorable position. We can afford to be patient and observe the data, because we know that if there are substantial changes in the risks on either side, we are in a good position to take action." Key Decision This Month Amid Diverging Views In fact, similar divergences were already evident during the US Fed's May policy meeting. According to the minutes of the US Fed's May meeting released last week, some officials believed that imposing tariffs on intermediate goods (parts used in manufacturing products, such as steel or aluminum) could lead to more sustained increases in inflation. Multiple officials argued that supply chain disruptions caused by tariffs could also have a more lasting impact on inflation, reminiscent of such impacts during the pandemic. However, some officials also indicated that various factors might offset the upward and persistent trend in inflation, including reducing imposed tariffs through trade negotiations, low consumer acceptance of price increases, a potential economic slowdown, or companies shifting their focus to expanding market share rather than raising prices. All of this may bring more uncertainty to the US Fed's June policy meeting later this month—although the market generally expects the US Fed not to cut interest rates this month, the interest rate dot plot released alongside the monetary policy statement this month may reveal the true views of US Fed officials on the potential for interest rate cuts in the remainder of the year. In the dot plot released in March this year, 11 out of 19 policymakers projected at least two interest rate cuts this year. Whether that many officials would still support two rate cuts this month will undoubtedly become the focus for many market participants...