Dovish Turnaround Record: The Federal Reserve Finally Admits Past Strategy was 'Self-Deception'!

Old Powell's speech this time directly tore off the Federal Reserve's 'dovish mask' from the past few years!

To put it simply, the Federal Reserve used to love saying, 'Let inflation exceed 2%,' but after the pandemic, inflation skyrocketed out of control, and now they finally admit that this rhetoric was purely a deception. From now on, if anyone dares to say, 'A little over is fine,' the Federal Reserve will be the first to slap back!

What's even harsher is the major turnaround in employment policy. The Federal Reserve used to adopt a stance of 'as long as everyone has a job, I will never raise interest rates,' but the market interpreted this as 'the Federal Reserve is a paper tiger, afraid to tighten the money supply.' Now Powell has made it clear: stop focusing on 'underemployment'; if the labor market overheats, we will raise rates without hesitation!

There are two core signals: First, 2% inflation is a hard rule; exceeding it means policy failure, so don't expect the Federal Reserve to turn a blind eye;

Second, interest rate hikes will no longer consider employment data; even if the data looks good, as long as they feel the economy is overheating, they will act in a minute.

In the end, the Federal Reserve wants to tell the market: don't fantasize about short-term rate cuts; inflation data needs to stabilize for several months before we might consider easing!

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