Powell's Words Change the Landscape of Cryptocurrency
On March 20, the Federal Reserve announced that the benchmark interest rate remains steady at a range of 4.25% to 4.50%, as the market expected, while revealing that the economic outlook is shrouded in a layer of uncertainty. From the dot plot, it can be seen that the expectation of two rate cuts in 2025 remains unchanged, consistent with the end of last year. In addition, the Federal Reserve also revealed that it will slow down its balance sheet 'reduction' pace starting April 1.
【Voices of Rate Cuts in June Are Rising, the Market is on Edge.】
The same day's data showed that traders in the futures market have increased their confidence in the Federal Reserve restarting rate cuts in June, with the probability rising to 62.1%, up from the previous 57% before the Federal Reserve's decision.
Federal Reserve Chairman Powell strongly supports the solid foundation of the U.S. economy at the press conference, stating that the slowdown in balance sheet reduction is merely a 'technical' adjustment. He candidly mentioned that he is carefully analyzing economic data, and despite a slowdown in consumer spending and increased household concerns, this is a natural adjustment following previous rapid growth, and the labor market remains as solid as a rock.
It is worth noting that Powell mentioned the topic of 'tariffs' for the first time in public. When asked about the impact of tariffs on inflation forecasts, he admitted that it is difficult to precisely analyze the extent to which tariffs have driven up inflation, but he is confident that 'tariffs are a significant contributor.' Regarding the impact of the Trump administration's policies on the economy, Powell stated that he would be cautious and avoid drawing direct conclusions, and analysts believe he is skillfully avoiding external speculation by focusing on monthly data.