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BlockBeats News, June 4th. As the FOMC meeting approaches this month, the market's expectations for a Fed rate cut continue to diminish. Reuters columnist Mike Dolan stated that the sole remaining "one rate cut this year" expectation in the dot plot may be completely removed, and there is even the possibility of the new Chair, Kevin Wash, pushing to scrap the dot plot mechanism. Currently, the AI investment boom and the Middle East situation have boosted energy prices, reigniting inflationary pressures. The U.S. labor market remains resilient, with private payrolls adding 122,000 jobs in May, surpassing expectations, leading the market to start pricing in the possibility of a rate hike this year. Reports indicate that the upcoming meeting is not expected to result in an immediate rate hike, but the policy statement may further downplay the dovish stance. Several officials have previously suggested removing related forward guidance, and the once dovish Waller has recently shifted to supporting a more hawkish stance. Economist Tim Duy from SGH Macro Advisors stated that the Fed is internally reassessing last year's rate cut decision, with an increasing number of officials laying the groundwork for future rate hikes. Meanwhile, Wash's hiring of conservative economist Paul Winfree, who has advocated for weakening the Fed's employment target, as an advisor has deepened concerns in the market about his hawkish stance. Analysts believe that as easing expectations recede, the Fed's policy cycle may have already shifted, potentially leading to significantly increased volatility in the U.S. bond and interest rate markets in the second half of the year.

According to ChainCatcher, citing Beijing Business Daily, the Monetary Authority of Macao has announced that Macao has completed integration with the multilateral central bank digital currency bridge project mBridge, and on June 2 officially launched “on-bridge” transactions for local banks to build an efficient, secure, and low-cost cross-border payment and settlement channel.

Japanese government bonds weakened for a second consecutive trading day, nearly erasing all gains from Tuesday. The yield curve steepened for maturities within 15 years and then leveled out. Compared with three days ago, 2-year and 5-year yields have risen, while yields for maturities of 10 years and above have declined, mainly due to growing market expectations of a rate hike at this month's policy meeting. Bank of Japan Governor Kazuo Ueda said on Wednesday that the second-round effects of inflation triggered by rising oil prices are more likely to cause underlying inflation to persistently rise, making it necessary for the central bank to take this into consideration when implementing its policies.Ueda warned that if the central bank is slow in taking the necessary policy actions, it will be forced to raise rates sharply, which could place a significant burden on economic activity, markets, and the financial system. He believes that it is now more important to guard against the risk of inflation significantly overshooting expectations and subsequently having a negative impact on the economy, rather than worrying about downside risks to the economy. Institutions report that the Bank of Japan will consider raising rates to 1% at this month's meeting and may hike again before the end of the year. Following the announcement, the 10-year yield briefly touched 2.67%.Ueda emphasized that the functionality of the Japanese government bond market has steadily improved during the process of reducing bond purchases, with long-term yields increasingly determined by market forces. However, it will take time for Japanese banks and retail investors to increase their holdings of government bonds, and the central bank should take this into account when deciding on further reduction plans. The afternoon auction result for non-competitive bonds was weaker than expected, with the 30-year non-competitive bond yield rising by 6.5 basis points compared to yesterday, and selling intensified. However, spot bonds have already partly priced in the possibility of a rate hike, and futures quickly rebounded after hitting a daily low, showing that the market is digesting the new policy trajectory.