Federal Reserve officials signal: monetary policy remains tight, and the impact of tariffs will gradually diminish next year

2025-12-12 13:12:15

【Crypto】The recent speech by Federal Reserve Chair Powell has sent several important signals to the market.

What is her core concern? The labor market. In her own words: “My concerns about a softening labor market still slightly outweigh the risks of inflation rising.” In other words, the pressure on employment keeps her more awake than the inflation risks.

But this doesn’t mean she will rush to cut rates further. Powell emphasized that the current monetary policy remains somewhat restrictive. This is key — she is hinting that the existing interest rate levels, combined with the cumulative effects of past tightening policies, should be sufficient to help inflation gradually return to the 2% target.

Why is she relatively optimistic about inflation prospects next year? Mainly because the impact of tariffs will gradually diminish. Her logic is: over time, the upward effect of tariffs will fade, and inflation is very likely to gradually decline.

Looking back, the Federal Reserve has already cut rates by a total of 75 basis points. Powell described this as “insurance against further deterioration of the labor market.” As for the labor market itself, she used a vivid metaphor: “It’s bending but not broken.” In other words, the situation is worsening but hasn’t reached a critical point.

It’s worth noting that she did not provide explicit forward guidance in her speech. However, she revealed that the situation will become clearer early next year, when she will become a voting member of the FOMC and will be able to make more definitive judgments with additional information.

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AirdropAnxiety

· 2025-12-15 11:37

You're here again claiming that "tariff impacts will fade," as if the market has no memory... By the way, Paulson's recent comments seem to be a preemptive warning to continue holding interest rates, and employment is about to take the blame again.

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GateUser-beba108d

· 2025-12-15 11:21

Paulson's set of rhetoric, to put it simply, is "We're not in a hurry to continue harvesting the chives," but interest rates still need to be maintained to suppress inflation... To put it nicely, it's actually just looking for an excuse to keep high interest rates. Tariffs fading? Well, that depends on how Trump manipulates things.

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GasOptimizer

· 2025-12-13 23:46

So we still have to wait. The interest rate cut is on hold for now... The tariffs are really a variable; who can say how quickly they will fade away?

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ContractTester

· 2025-12-12 13:42

Wait, is Paulson suggesting that policy should just maintain the current stance? Then don't cut interest rates recklessly. I'm just worried that another surprise rate cut will confuse the market again.

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LiquidatedTwice

· 2025-12-12 13:41

Wait, is what Paulsen is saying that the policy still needs to hold? Then the interest rate cut is just going to be shelved... I believe in the fading of tariffs, but when will it actually reflect in prices? I feel like this set of arguments is just delaying time.

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APY追逐者

· 2025-12-12 13:31

Basically, it means we still have to keep holding on, interest rate cuts are unlikely... Employment is a hidden risk, but they also don't dare to make reckless moves, fearing inflation will bite back again. As for tariffs, they'll be absorbed over time; just waiting is enough.

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GhostChainLoyalist

· 2025-12-12 13:30

Wait, what is Paulson implying? To put it simply, the interest rates should stop, everyone stop thinking about it.

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New_Ser_Ngmi

· 2025-12-12 13:28

Paulson's words sound like he's saying: Don't expect further rate cuts for now; our current interest rate level is actually tight enough. As for tariffs... will they fade next year? Ha, let's wait and see. Can tariff policies remain unchanged these days? The employment side has indeed had some issues that are enough to worry her, but this can't directly translate into a rate cut either.

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HodlAndChill

· 2025-12-12 13:22

Interest rate hikes pause, but is employment the real pain point? Sounds like the Federal Reserve is still playing Tai Chi... The tariffs are said to dissipate once they fade away, but I can't quite buy that logic haha

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GateUser-e19e9c10

· 2025-12-12 13:15

Paulson's meaning is... still need to wait, don't expect interest rate cuts anymore. --- Tariffs receding? Just listen, no one can say for sure how it will actually go. --- So now it's about stabilizing employment and controlling inflation at the same time? That's a bit tough. --- The real issue is the pressure in the labor market; inflation is secondary. That's an interesting logic. --- No more interest rate cuts now; the 75bp reduction has reached its limit. The outlook for next year is uncertain. --- Waiting for tariffs to decline? I think the industry is still ramping up its layout, probably expecting a protracted battle. --- Basically, monetary policy remains tight; don't overthink the market. --- The Fed's current rhetoric... feels like they're paving the way not to continue cutting rates.

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