Fed Chair Jerome Powell Delivers Key Signals to the Market
In his latest speech, Federal Reserve Chairman Jerome Powell delivered pivotal remarks that analysts view as a major turning point for global markets. According to analyst YT Jia, the core message of Powell’s address was clear: “Quantitative Tightening (QT) is coming to an end.” Jia described this as one of the most significant macroeconomic shifts of the year.
Over the past two years, the Fed has tightened liquidity through both interest rate hikes and balance sheet reduction. However, Powell’s explicit indication that QT will be halted signals to markets that the liquidity squeeze is effectively over. While this doesn’t yet mark a full return to Quantitative Easing (QE), the effect is similar — the supply of U.S. dollars is now transitioning from contraction to stability, shifting market sentiment from negative to positive for risk assets.
Jia emphasized that Bitcoin and the broader crypto market are particularly sensitive to such policy changes and often react ahead of traditional markets. Powell’s acknowledgment of the resilience of the U.S. dollar system was also noteworthy, subtly recognizing the role of stablecoins in facilitating global dollar liquidity.
The analyst further noted that the slowdown in liquidity tightening and the implicit approval of stablecoins could directly benefit the cryptocurrency sector. Jia expects FFAI’s Dual-Flywheel strategy (EAI + Crypto) to gain traction in this new environment, with capital likely flowing into both technology and crypto markets.
Jia concluded, saying:
“Everything we anticipated is now unfolding.”