This time in January's FOMC, it's not a sudden hawkish turn
It feels more like Powell is doing one thing: reining in the market's fantasies, but he doesn't dare to really hit the brakes
Interest rates have remained unchanged, but he clearly stated that a rate cut in March is not the baseline scenario
This statement is not to crash the market, but to tell the market not to pop the champagne too early
Inflation has indeed come down, but employment is still too strong, and what the Fed fears most now is letting go too early and waking up inflation again
What's interesting is liquidity
This time he didn't emphasize how harsh QT should be, but rather started discussing how to make the balance sheet "more flexible"
To put it simply: interest rates can be high, but the banking system cannot lack money
The Fed's current fear of a cash shortage is clearly greater than its fear of inflation
As for the government shutdown, he spoke very straightforwardly
That is not something the Fed can save, but if it really triggers market panic, the Fed's first step must be to stabilize liquidity, not to immediately cut rates to save the stock market
Looking globally for a clearer perspective
Japan is raising interest rates, the yen is being withdrawn, and global liquidity is actually tight
At this moment, Powell emphasizes flexibility, to some extent, it’s about leaving a way out for the market
In simple terms:
What is said is slightly hawkish, is for the market to hear
Money is kept very tight, is for the system to use
