Powell's Major Speech: No Rush to Cut Rates, Slowing Balance Sheet Reduction is a Key Signal
🔥 The Federal Reserve's meeting paused rate hikes as expected, and Powell's statements released two core messages
Rate Cut: Clearly Paused, No Action in December
Powell emphasized that "there will be no rush to cut rates"; the Federal Reserve holds the policy initiative and will adjust dynamically based on economic and employment data. Patience is the current main theme.
Balance Sheet Reduction: Quietly Slowing Down, Releasing Liquidity
Slowing the pace of balance sheet reduction became the highlight of this meeting, aimed at a smooth transition and avoiding a sudden tightening of market liquidity, akin to a covert "loosening".
Economy and Inflation: Strong but Worrisome, Tariffs Add Uncertainty
The fundamentals of the U.S. economy are solid, but corporate and consumer confidence is weakening; inflation remains a core concern, and new tariffs may drive up inflation. If the impact is one-time, it will not be considered by the Federal Reserve in policy decisions.
Summary: The Policy of "Dragging", the Tightest Liquidity Moment May Have Passed
The combination of no rate cut and a gradual balance sheet reduction means that the pressure on market liquidity is gradually easing, but the window for rate cuts still needs to be awaited.
💡 Note: Powell's term lasts until May 2026, and there are rumors about automatic departure; the Trump team is preparing for successor nominations, and the market anticipates a new chairman who supports rate cuts to boost risk assets.
