【Powell: Interest rates unchanged in the short term, long-term policy path depends on data and risk evolution.】
1: Monetary Policy Stance
1. Interest Rate Policy
Powell clearly stated that the current interest rate level (4.25%-4.5%) is at a "good position" and will not be adjusted hastily in the short term. He emphasized:
◦ Rate cut conditions: need to see "substantial progress" in inflation or a significant weakening in the job market.
◦ Possibility of rate hikes: If the economy is unexpectedly strong and inflation rebounds, restarting rate hikes cannot be ruled out.
2. Market Expectation Management
Although the market generally expects the Federal Reserve to cut rates 3-4 times in 2025 (the first possibly in June), Powell did not directly respond to the timeline, only stating that policy adjustments will "depend on data." He warned that overly optimistic rate cut expectations could trigger market volatility. After the speech, the three major U.S. stock indexes hit daily lows (S&P 500 down 1.6%, Nasdaq plunging 2.5%), reflecting market concerns about "higher rates for longer."
2: Cryptocurrency Regulation
1. Regulatory Framework Adjustment
Powell announced that the Federal Reserve plans to "partially relax" regulations on banking services related to cryptocurrencies, allowing banks to provide services to compliant crypto companies under the premise of "effectively managing risks." He emphasized:
◦ Risk Control: Banks must establish strict anti-money laundering (AML) and customer identification (KYC) mechanisms.
◦ Innovation Support: Regulation should not hinder technological innovation but must guard against systemic risks.
2. Stablecoins and Legislative Progress
Powell supports Congress in pushing for stablecoin regulatory legislation, believing that a "clear legal framework" is the foundation for the healthy development of the cryptocurrency market. He called for cooperation between the industry and regulatory agencies to avoid repeating the mistakes of events like FTX.
Future Focus Points
◦ Data Dependency: May inflation data, non-farm payroll reports, and preliminary second-quarter GDP will become key signals for policy shifts.
◦ External Risks: Geopolitical conflicts, global supply chain disruptions, and trends in Trump’s policies may further complicate Federal Reserve decision-making.
