Summary of the interest rate decision and Powell's speech in the early morning:
1. The dot plot indicates no rate cuts, the probability of a cut in May is extremely low, unless the unemployment rate suddenly spikes, there will be no consideration of rate cuts; the economy and labor market are very strong. (Hawkish)
2. Regarding Quantitative Tightening (QT), there will be considerations to reduce QT after April 1st; currently, the market predicts QT will stop in May, so we may choose to slowly start reducing the pace of QT, but it may not necessarily stop directly; the timeline is quite long (playing Tai Chi, more dovish)
3. Tariff issues are the main factor causing inflation, and there will be no backing down for now; if you want to lay off workers, feel free, the expectation for rate cuts will just be extended again, lasting until the midterm elections. (Hawkish)
The sharp rebound that appears at this position is very normal; there is currently no significant negative news or uncertainty that would lead to another market sell-off, but initiating wide fluctuations does not mean that retail investors won't be tricked into buying in order to continue the sell-off.
1. The dot plot indicates no rate cuts, the probability of a cut in May is extremely low, unless the unemployment rate suddenly spikes, there will be no consideration of rate cuts; the economy and labor market are very strong. (Hawkish)
2. Regarding Quantitative Tightening (QT), there will be considerations to reduce QT after April 1st; currently, the market predicts QT will stop in May, so we may choose to slowly start reducing the pace of QT, but it may not necessarily stop directly; the timeline is quite long (playing Tai Chi, more dovish)
3. Tariff issues are the main factor causing inflation, and there will be no backing down for now; if you want to lay off workers, feel free, the expectation for rate cuts will just be extended again, lasting until the midterm elections. (Hawkish)
The sharp rebound that appears at this position is very normal; there is currently no significant negative news or uncertainty that would lead to another market sell-off, but initiating wide fluctuations does not mean that retail investors won't be tricked into buying in order to continue the sell-off.