Federal Reserve unlikely to cut rates without suspense, but the key question is whether they dare continue to support rate-cut expectations. Now oil prices are being held up by Middle East tensions, and once there are signs of inflation expectations rising, the Fed's language could easily shift from "inflation is declining" to "there is uncertainty." Once that phrase changes, the market's imagination space for rate cuts will shrink. So the focus isn't the decision itself, but whether Powell has the courage to continue leaning dovish.

On the BOJ side, not hiking rates is also correct, but the real bombshell is "whether they will hint at exiting easing in the future." Even just a subtle hint could move Japanese rates, which would drain global liquidity—many people underestimate this impact.

Looking further ahead, Powell mostly sets short-term fluctuations, but what truly influences medium-term expectations is statements from potential successors like Waller. If the hearing leans hawkish, the market will advance the future path toward tightening; if it leans dovish, the current narrative of "higher rates for longer" will start to weaken.

Summary in one sentence: This week isn't a holding pattern, but rather stillness on the surface while expectations are being repriced underneath.