As soon as Powell spoke, the market was thrown into confusion! The interest rate cut is clearly coming, but money may not necessarily become looser?
Just now, the Federal Reserve announced two major actions: officially cutting interest rates + stopping the balance sheet reduction! This should have been news that brought cheers from everyone, but the market just couldn't get excited—it's all because of Powell's harsh words added on site.
He was very straightforward: if there are no new developments next, our pace of interest rate cuts may have to slow down.
To put it bluntly, this time it has decreased, but there is no guarantee it will decrease again next time. The December decrease is not finalized at all!
Looking at the internal meeting again, two dissenting votes actually appeared. This has become lively, even the Federal Reserve's own people are arguing: some are worried that cutting too quickly will cause problems, while others fear that not cutting will strain the economy.
The current Federal Reserve is like walking a tightrope—wanting to boost the economy while fearing inflation could come back with a vengeance.
So how will the cryptocurrency market go?
In the short term, there will definitely be ups and downs. It's either a rise followed by a crash or a drop followed by a rise; volatility is unavoidable.
But if we extend the time frame a bit, this interest rate cut and the halt of balance sheet reduction have already indicated one thing: the U.S. monetary policy has officially entered a period of easing!
However, Powell doesn't want to let the market get too excited; he prefers to ease the water bit by bit rather than make a sudden change.
So the conclusion is: interest rate cuts are favorable, but they won't take off immediately. Powell's actions this time are like stepping on the gas while hitting the brakes.
Everyone should maintain a stable mindset and not be swayed by short-term fluctuations. Tomorrow there will be a meeting with international bigwigs, likely leaning towards a warm outlook. Tonight, old Powell just released hawkish signals, and tomorrow who knows, the blonde might come out to feed the doves!
