Powell, the ancient Greek god of expectations

On December 18, local time, the Federal Reserve held an interest rate meeting and announced a 25 basis point cut to between 4.25% and 4.5%. This was the third consecutive meeting of the Federal Reserve after September and November to announce a rate cut, and the cumulative rate cut for the whole year reached 100 basis points

In fact, the result of this rate cut was not unexpected, and what caused the market to panic was Powell's answer after the reporter's question

"The rate cut will be slower next year, which will depend on inflation and employment, and then judged based on the current data. The result may be a halving of the number of rate cuts."

Affected by the Fed's "hawkish" stance, the three major U.S. stock indexes fell sharply, with the Dow Jones Industrial Average falling 2.58%, the S&P 500 falling 2.95%, the Nasdaq Composite falling 3.56%, and Tesla falling more than 8.28%.

Looking back at the Fed's operations over the past four years, it is not an exaggeration to give Powell the title of "Expectation Management Master"

In March 2020, the Fed responded quickly, cutting interest rates by 50 basis points on the 3rd, and held an emergency meeting again on the 15th, lowering the target range of the federal funds rate by 1 percentage point to between 0% and 0.25%. The low interest rates during 2020-2022 brought about a two-year bull market in the US stock market.

When the US stock market gradually turned bearish in early 2022, Powell began another two-year interest rate hike, siphoning global funds by increasing the yield of US dollar assets. After experiencing a decline throughout 2022, he pulled up the US stock market through global asset inflows.

However, such repeated monetary strategies have resulted in a further widening of the gap between the rich and the poor in the United States.

The simplest example is the sharp rise in prices. Previously, a blogger had counted the expenditure on meat, eggs, milk and daily consumption. Simply put, if you go out to a restaurant normally, the per capita consumption of two people may exceed US$100, and the cost of a night in an ordinary hotel is mostly more than US$200.

It may not be obvious to the rich, but for most grassroots residents, the price of daily necessities caused by inflation has risen.

It can only be said that any strategy has its two sides. To some extent, the continued increase in US debt caused by the interest rate hike has reached a point that cannot be ignored. $BTC