The Federal Reserve's Stunning Shift: Market Turbulence Under Powell's "Hawkish" Signals

In the financial markets, every move by the Federal Reserve draws significant attention. Recently, the markets have been in turmoil, with the source being signals from Federal Reserve Chairman Powell.

Strangely, the market has remained optimistic about interest rate cuts, with the probability of a cut in May rising abruptly from 14% to 60%, and some even predicting that rates will drop to 3% by the end of the year. However, economist Tim Duy found that Powell's latest statements indicate that the Federal Reserve is likely to continue raising rates, which is completely contrary to market expectations.

Powell's signals are deeply concealed. When discussing inflation expectations, he mentioned long-term inflation issues for the first time, which feels like an implication for rate hikes. Moreover, the statements he originally used to indicate that there would be no rate hikes have also disappeared, becoming vague, which suggests that the Federal Reserve still has the option to raise rates. Meanwhile, U.S. Treasury yields have already started to decline.

Duy believes that Powell's actions are not accidental; he is deliberately leading the market into a "trap," and the market is sure to experience significant fluctuations next. Investors are now in a dilemma; the market believes that rates will be cut, prompting everyone to seek to buy more high-risk assets to make more money. However, the Federal Reserve may raise rates, which would put those investments at risk. For the global economy, the Federal Reserve's unclear policy could lead to capital fleeing emerging market countries if rates are raised, resulting in currency depreciation; if they cut rates as the market hopes, it could lead to asset bubbles.

Last Friday, Powell quietly released a hawkish signal, but the market didn't respond at all at the time. Once Powell's "hawkish" signal was released, the market began to fluctuate. How the financial markets will change next, and how the Federal Reserve will make decisions, the whole world is watching. 点击进入币安王牌KOL专属群

If you also want to navigate through bull and bear markets, doubling your returns and breaking free from the constraints of bull and bear markets, feel free to message me to join us. To achieve consistent profits, you must follow a team of professional analysts and traders!