The Federal Reserve’s interest rate hike “stopped and never stopped”, where will the market go in the off-season?

In the early hours of this morning, the Federal Reserve announced a suspension of interest rate hikes, keeping the target range of the federal funds rate unchanged at 5.0% to 5.25%. This was digested ahead of time.
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It is worth noting that the Federal Reserve’s interest rate meeting revealed that this time it is a “pause” rate hike, not a “stop” rate hike. It is expected that there will be two more 25 basis point rate hikes before the end of the year. And Powell also pointed out at the meeting that it would be inappropriate to cut interest rates this year, and no one among FOMC members predicted a rate cut in 2023. This means that the Fed has not stopped raising interest rates, and the possibility of the Fed cutting interest rates this year has also greatly weakened.
The Fed’s slowdown in raising interest rates this time is conducive to the periodic stability of commodity prices, but there is still a possibility of raising interest rates in the future, and the market will still ferment pessimism in advance. International commodities are still in a period of shock.
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From the perspective of the domestic market, the National Bureau of Statistics released the domestic economic data for May today. Among them, the added value of industrial enterprises above designated size, national fixed asset investment, real estate investment and other indicators that are highly related to the steel industry have all declined. This reflects that the steel market demand in May was weak. However, the worse the data performance, the higher the market’s calls and expectations for the country to introduce more powerful stimulus policies in the later stage.
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In addition, steel production, which has been at a high level, has finally fallen back. According to data from the National Bureau of Statistics, in May, my country’s crude steel output was 90.12 million tons, a year-on-year decrease of 7.3%; the national average daily output of crude steel in May was 2.907 million tons, a month-on-month decrease of 5.9%.

But it is worth noting that the current demand has gradually entered the seasonal off-season, and the high temperature in the north and the rainy weather in the south are gradually increasing, which is bound to significantly restrict outdoor construction. Therefore, the trend of weak demand in the off-season is difficult to change, and the overall market demand will be in the game of “strong expectations” and “weak demand”.
From the perspective of the market, after entering June, the steel price has rebounded more obviously, and the overall market presents a market that is “not weak in the off-season”.
In the short term, various domestic macro data are still not optimistic, but a series of policies introduced recently have brought a ray of hope to the market. The market has fierce competition between long and short, and the short-term game has not yet come to fruition. Steel prices are still in a period of wide fluctuations .