It's enough to read this!! Fed Chairman Jerome Powell's speech is an in-depth interpretation

At the heart of the overall statement was the message that external factors, particularly tariffs, are largely to blame for the current economic woes and policy uncertainty.

That's right, it's talking about Trump.

The Fed tends to keep interest rates high, hold off on rate cuts, and make it clear that it will not bail out easily.

1. Macro aspect: high interest rates and tighter liquidity
Powell emphasized that the frequently changing tariff policy pushes up inflation and suppresses growth, which may lead to economic stagnation + inflation. In the midst of this high degree of uncertainty, the Fed has chosen to stand still.

Subtext: Don't blame me for raising interest rates for too long, blame the policy environment for being too chaotic!

The "hawks" stand firmly:
Refusing to bail out the market, making it clear that you don't expect the Fed to intervene as soon as the market falls, as it has done in the past.

"Wait and see" for interest rate cuts: interest rates will not be cut easily in the short term, interest rates may deviate from the target, and policy will remain tight.

Continued Balance Sheet Reduction (QT): Quantitative tightening is still underway, meaning continued pumping from the market, which is not good for the liquidity-dependent crypto market.

Fighting Inflation Priority:
Core goal: Controlling inflation takes precedence over preserving employment, even if it may face a complex situation of rising unemployment and inflation in the future.

Data: Inflation has eased from its highs, but it has been slow and remains above the 2% target. The headline PCE is expected to be about 2.3% y/y in March, and the core PCE is expected to be around 2.6% y/y.

Global factors: External factors such as supply chain issues and tariffs could make inflation more persistent.

Global central bank support: In the event of an extreme dollar shortage, the Fed is prepared to provide liquidity (e.g., central bank swaps), but this is more to prevent systemic risk than to actively release water.

2. In terms of the crypto market: the regulation is clear, which is good for stablecoins
Official recognition: Again, cryptocurrencies (especially stablecoins) are becoming mainstream.

Support for legislation: Considers it "reasonable and positive" to establish a legal framework for stablecoins.

Favorable institutional channels: It is expected that banks will loosen their regulation in serving crypto customers, which may allow traditional financial institutions (banks) to participate in the crypto market at a deeper level, such as providing services such as custody and trading.

Good for BTC? Lowering the barrier to entry for institutions is a long-term positive for assets such as BTC, which are considered institutional-grade.

Personal Opinion/Summary
The market reacted negatively to Powell's remarks, but if you look at the content, you didn't say anything new, so I think the market reacted aggressively.

Powell's plan for the next step is basically "no comment", which is also normal, and the current policy of the US government has not yet been clarified, and the macro environment is still fragile.

As for the issue of bailing out the market, I think he will definitely have to do it if it really collapses, otherwise he will be unemployed? But he couldn't say it explicitly.

#Gate.io 12周年