The Federal Reserve releases key signals! Brothers, the slow bull market has officially begun!
To help everyone quickly understand, I have organized key interpretations of the Federal Reserve's monetary policy meeting:
1️⃣ Hawkish signals in the dot plot: The dot plot shows that the median forecast for interest rate cuts this year remains at 2 (consistent with December last year), but the number of people supporting more than 2 cuts this year has decreased: from 15 to 11.
· Last dot plot: 10 officials expected 2 cuts, 3 expected 1 cut, and 1 expected no cuts.
· This dot plot: 9 officials expected 2 cuts, 4 expected 1 cut, and 4 expected no cuts.
2️⃣ Rising uncertainty of stagflation: The Economic Projections (SEP) lowered the GDP forecast for 2025 by 0.4 percentage points and raised the inflation forecast for 2025 by 0.2 percentage points. The statement “the risks to achieving employment and inflation goals are broadly balanced” has been removed and replaced with “uncertainty around the economic outlook has increased.”
3️⃣ Subtle slowdown in balance sheet reduction: An unexpected announcement in this meeting is that starting in April, the pace of balance sheet reduction will slow, lowering the monthly redemption cap for U.S. Treasury bonds from $25 billion to $5 billion. Powell emphasized that this is not a change in monetary policy stance, but a technical adjustment to respond to the debt ceiling, and it may imply that the end of balance sheet reduction is postponed. However, in the current situation, the market may think more about it. In the last round, the Federal Reserve announced a slowdown in balance sheet reduction in May 2019 and officially stopped in August 2019.
4️⃣ Carefully arranged press conference, Powell delivered four key statements that boosted market confidence:
· No need to adjust the policy stance (previously “not in a hurry to adjust”, now “no need to adjust”, reflecting confidence in the economy)
· The impact of tariffs on inflation is temporary (implying tariffs are not as severe as people imagine)
· There will be no inflation story to tell in five years (expressing confidence in inflation)
· If the labor market weakens, we can ease policy if necessary (providing some reassurance to the market)
Brothers, there are two possible scenarios for the future policy path: a cooling of inflation leading to interest rate cuts, or a sharp economic downturn leading to interest rate cuts, both are possible.
The more chaotic it gets, the more favorable it is; brothers, the slow bull market has officially started! #币安LaunchpoolNIL $BTC