A complete interpretation of Powell’s speech!

Federal Reserve Chairman Powell's latest speech clearly shifted to a dovish stance, which was in sharp contrast to his previous equivocal attitude. The following is an analysis of the speech:

1. The time has come for policy adjustments: Powell hinted that policy adjustments may happen soon, and the market interpreted it as an imminent interest rate cut. 2. No longer seeking further labor market cooling**: This statement suggests that the Fed does not want to overly suppress the job market, possibly because downside risks to the labor market have become more prominent.

3. Increased confidence that inflation will return to 2%**: This indicates that the Federal Reserve believes that inflation has gradually been brought under control, thus providing more room for interest rate cuts.

4. The upward risk of inflation has weakened, and the downward risk of employment has increased. This comment may reflect the Fed's belief that economic growth is slowing, but inflationary pressure is reducing.

, market reaction:

1. Rise in interest rate cut expectations: As Powell has made it clear that he is concerned about avoiding a weakening labor market, the market's probability of the Federal Reserve cutting interest rates by 50 basis points in September has increased significantly, thus stimulating adjustments in the interest rate futures market.

2. Comments from Nick Timiraos, "Fed's mouthpiece": He believes that Powell's policy shift has been completed, and this speech is the strongest signal to date for an interest rate cut. This suggests the Fed may be ready to take action in September.

Impact on crypto markets (e.g. Bitcoin BTC):

Powell's speech triggered short-term volatility in the market, and Bitcoin quickly pulled back after breaking above $62,000. Typically, increased expectations of interest rate cuts lead to increased investor interest in risk assets such as Bitcoin, as risk aversion in traditional markets increases. However, BTC may also experience a short-term technical correction due to uncertainty in the market.

Summarize:

Powell's latest statement strengthened market expectations for the Federal Reserve to cut interest rates in September. It also showed that the Federal Reserve's concerns about inflation have eased and it is paying more attention to the performance of the job market. This may support gains in risk assets in the short term, but market volatility remains high and investors should approach with caution! #美联储何时降息？ #杰克逊霍尔年会 #美国7月PPI低于预期 #美联储货币纪要 #BTC☀ $BTC $ETH