Federal Reserve Chairman Powell finally released a clear signal that the market's long-awaited policy adjustments are coming. Different from the vague attitude in the past, Powell has shown a clear dovish stance this time, indicating that the possibility of a rate cut in September has greatly increased. The shift has also made market participants view Powell more positively.
The following are several key points in Powell's speech - the "strongest message" of interest rate cuts:
1⃣️The time is ripe for policy adjustment, and the future policy path will be determined based on the balance of economic data, prospects and risks.
2⃣️Expressed greater confidence that inflation will fall back to the 2% target level.
3⃣️In the short term, the labor market is unlikely to be a factor driving rising inflation; at the same time, further cooling of the labor market is not sought or welcomed.
4⃣️Upside risks to inflation have decreased, while downside risks to the job market are increasing.
5⃣️The market interpreted Powell's remarks as the strongest signal to date for a rate cut. Spot gold prices fluctuated up to $20 within 15 minutes, and the U.S. dollar index DXY fell below the 101 mark.
Market sentiment has been significantly boosted, the price of Bitcoin exceeded $62,000, and U.S. stocks opened higher. However, it is important to note that this does not mean that market liquidity will immediately increase, and the current changes are merely adjustments to expectations. We should remain vigilant, especially when market sentiment is high, there may be bookmakers taking advantage of this opportunity to sell. Therefore, it is not recommended to use high leverage to chase prices at this time.