Just now, the speech of Fed Chairman Powell revealed a not very friendly message to the market. First of all, Powell affirmed the strength of the US economy and the labor market, but these two strengths gave the Fed more confidence and did not rush to cut interest rates, worrying that the economy would be affected.
Then Powell reiterated that he would not retreat from the 2% inflation target, and made it clear that there is no sign of inflation returning to 2% at present, and believed that if inflation continues to rise, the Fed will continue to maintain high interest rates as long as it is necessary.
He also explained that the strong economy and inflation brought great uncertainty to this year's interest rate cuts, which is a relatively bearish thing. Originally, the US stock market was still on an upward trend. After Powell said this, it began to fall, driving#BTCand#ETHThere was also a decline
Then Powell also said that the current inflation is not caused by overheated demand. I personally think that his subtext may be due to geopolitical conflicts. Powell also admitted that the Fed's every move may have an impact on the global economy, but inflation is still a problem that the Fed has to solve at present
So from now on, three times may be a more optimistic data for interest rate cuts in 2024. Either the economy will go into recession, causing inflation to fall rapidly, and the Fed will cut interest rates, but this is a remedy for the loss, or the Fed will continue to force interest rates to remain high, and the probability of defensive interest rate cuts may decrease, so the most important thing is to look at inflation in the next two months
If inflation, especially core inflation, can continue to decline, then there is still a chance for defensive interest rate cuts. Of course, the US election will be held at the end of the year, so keep looking forward to it
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