Federal Reserve officials' dovish tone boosts risk asset expectations, with interest rates still a distance from the neutral level

YieldWhisperer · 2025-12-17T13:26:11+00:00

【Chain Wen】The recent statements by Federal Reserve Board members have attracted market attention. They indicated that inflation is expected to continue to decline, but the current interest rate level is actually still above the true neutral rate—roughly 50 to 100 basis points need to be cut to return to equilibrium. Although employment has softened somewhat, it has not reached a desperate level, and there has been no cliff-like decline.Based on these judgments, they support the Fed maintaining its rate-cutting pace while emphasizing that no aggressive policy measures are necessary. This relatively moderate stance has been interpreted by the market as a dovish signal—after all, it adds another voice supporting continued easing. As a result, U.S. Treasuries responded accordingly, with previous declines significantly narrowing.For those focused on macro policies and asset allocation, such statements are very important. Changes in interest rate expectations directly affect capital flows, especially the attractiveness of risk assets. When central bank officials signal a relatively dovish stance, it often leads to risk assets, including digital assets, regaining interest.

YieldWhisperer

2025-12-17 13:26:11

【Chain Wen】Federal Reserve Board members’ recent statements have attracted market attention. They indicated that inflation is expected to continue to decline, but the current interest rate level is actually still above the true neutral rate—roughly 50 to 100 basis points need to be cut to return to equilibrium.

Although employment has softened somewhat, it has not reached a state of despair, and there has been no cliff-like decline.

Based on these judgments, he supports the Federal Reserve maintaining its rate-cutting pace while emphasizing that no aggressive policy measures are necessary. This relatively dovish stance is interpreted by the market as a dovish signal—after all, it adds a voice supporting continued easing. As a result, U.S. Treasuries responded accordingly, with previous declines significantly narrowing.

For those focused on macro policies and asset allocation, such statements are very important. Changes in interest rate expectations directly impact capital flows, especially the attractiveness of risk assets. When central bank officials signal a relatively easing stance, it often leads to renewed interest in risk assets, including digital assets.

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ZenZKPlayer

· 2025-12-19 19:36

Once again, there are talks of a 50 to 100 basis point cut... sounds comfortable, but we’ll have to wait for it to actually happen. Will more dovish signals push up risk assets? Honestly, it’s still about liquidity expectations; this trick works every time. Is it considered stable if employment doesn’t experience a cliff-like decline? I see frequent news of layoffs at major tech companies. The interest rate cut cycle has begun, is this the wave where digital assets will take off... waiting for the market to move. The market gets volatile as soon as the Federal Reserve speaks, indicating that we’re all being led by expectations.

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SchroedingersFrontrun

· 2025-12-17 13:56

Here we go again with dovish hints. This routine is so familiar—asset prices start soaring right at the beginning of a rate-cut cycle. --- 50 to 100 basis points? Just listen, then it will be repeated again. --- Risk assets are saved, now the crypto world should come back to life. --- Employment is decent, inflation is falling, and the central bank continues to pump liquidity. This logical loop is indeed complete. --- It’s always like this—first create expectations, then repeatedly slap them down. I’ve learned. --- Wait, does this mean more cuts are coming? Then it’s probably time to buy the dip. --- Uh… really? Are they right about the neutral interest rate? Feels like the definition changes every time.

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