The "marshmallow test" of the Fed's policy
Recently, a series of policy measures by Fed Chairman Powell have sparked heated discussions in the market. According to Scott Bessent, CEO and chief investment officer of Key Square Group, Powell seems to be indecisive in dealing with economic challenges, which has led to instability in market confidence.
Bessent pointed out that Powell is similar to the "marshmallow test" in child psychology experiments, showing a tendency to lack self-control when facing economic regulation. In the past few quarters, Powell seemed to have successfully controlled inflation, but recent policy adjustments have confused the market.
It is reported that last year Powell announced that he would relax monetary policy, which led to a dramatic easing of the financial environment, which in turn drove the stock market up. However, this move also further exacerbated the inflation problem and brought uncertainty to the economy.
Bessent criticized Powell's policy approach, believing that he should handle interest rate adjustments more prudently to avoid further exacerbating market instability. Especially in the current high inflation situation, a stable monetary policy is needed to cope with economic challenges.
For investors, it is necessary to pay close attention to the policy direction of the Federal Reserve and make corresponding risk response measures. Both the crypto market and the traditional financial market may be affected by Powell's policy adjustments, so it is crucial to adjust investment strategies in a timely manner.
As the US economy develops, we expect Powell to formulate policies more prudently to ensure the steady growth of the economy and the healthy development of the market.
