At 8:30 PM Eastern Time tonight (8:30 AM Beijing time tomorrow), Federal Reserve Chairman Powell will deliver an important speech. The market holds its breath, as this concerns not only the future direction of monetary policy but may also trigger significant fluctuations in asset prices. Here are the three core issues that investors are most concerned about, as well as several potential 'plot twist' scenarios.

1. The three questions most concerning the market

(1) Is it a rate cut, or will 'higher for longer' continue?

  • Current background: U.S. inflation has not yet fallen to the 2% target, but economic growth is slowing, and the job market is beginning to show signs of fatigue.

  • Market expectations:

    Dovish (bullish): If Powell hints at the possibility of rate cuts in 2025 or signals that 'inflation is under control,' risk assets (like U.S. stocks, Bitcoin) may see a substantial rise.


    Hawkish (bearish): If he emphasizes that 'inflation remains sticky and there is no rush to cut rates,' it may trigger a short-term market pullback or even a plunge.


    (2) Will the Fed slow down its balance sheet reduction pace?

  • Current operation: The Fed is currently withdrawing about $95 billion in liquidity each month through 'balance sheet reduction' (contracting its balance sheet).

  • Highlights: If Powell suggests slowing down the QT pace, it would release liquidity pressure, which would be positive for the crypto market and growth stocks.

  • (3) How to view the risk of economic recession?


If Powell acknowledges that the economy faces downward pressure, it may be interpreted by the market as 'laying the groundwork for future rate cuts,' stimulating a rebound in risk assets.

2. Three 'Dramatic' Scenarios: Which big show will be performed tonight?


🎭 Scene One: Sudden 'Super Dovish' Remarks

Plot: Powell clearly states that 'inflation is generally under control' and hints that 'rate cuts are a key focus going forward.'

Market reaction:

  • U.S. stocks and Bitcoin surge, the U.S. dollar index plunges;


    Funds rotate in, altcoins rise rapidly, Meme coins (like DOGE, PEPE) explode in the short term.

    🎭 Scene Two: Unexpected 'Hawkish Return'

  • Plot: Powell emphasizes 'inflation risks remain, no possibility of another rate hike excluded', attitude becomes more hawkish.


  • Market reaction:

    U.S. stocks and Bitcoin quickly fall, the fear index (VIX) soars;


    High-leverage long positions in the crypto market are liquidated, causing significant short-term price fluctuations.

🎭 Scene Three: 'Vague Statements' Trigger Market Imagination

Plot: Powell continues to use the vague expression 'data-dependent.'

Market reaction:

  • Investors interpret differently, causing severe market fluctuations, and both bulls and bears may step on landmines;


    High-frequency trading dominates the market, exacerbating short-term volatility.

3. Potential impacts on the crypto market

  • Dovish tone: Bitcoin is expected to challenge the $120,000 mark, driving mainstream coins to rotate.

  • Hawkish tone: Bitcoin may retrace to the $110,000 support area, but long-term holders (so-called 'diamond hands') may choose to buy the dip.

  • Neutral/vague statement: The market may experience increased volatility in the short term, then return to being driven by technicals and sentiment.

📌 Summary:

Powell's words tonight could become a 'wind vane' for global markets in the second half of the year. For investors, it's not only about the content itself but also about how the market interprets it, especially during the heightened volatility in the short-term window, where position control and risk awareness outweigh directional judgment.