The recent statements from senior Federal Reserve officials have essentially shattered market expectations of rate cuts. Former Treasury Secretary Paulson and current officials like Smith have spoken out one after another, sending a remarkably consistent message: don’t expect any surprises in the near term, interest rates will remain high for a while longer.

Paulson was quite straightforward, stating that current interest rates are already slightly above the neutral level, which effectively means the economy is being put on the brakes. Smith went even further, believing that rates must stay at a level capable of continuously suppressing the economy in order to truly bring down inflation, this hot potato.

Let’s look at these key signals:

**Inflation remains the top challenge.** Although it has eased somewhat, pressure still exists. Smith was candid—reckless rate cuts could make inflation even harder to tackle, and market confidence in the Fed’s ability to hit the 2% target is wavering.

**The labor market needs to "cool down."** Smith’s view here is interesting—moderately cooling the labor market is actually necessary to prevent inflation from resurging. He emphasized that continuing to cut rates is unlikely to lead to large-scale hiring by companies, which breaks many people’s expectations.

**Economic growth slowdown has other roots.** Smith attributes the current slowdown mainly to structural factors rather than simple cyclical fluctuations. Implicitly, the Fed’s policy tools are more adept at dealing with cyclical crises, but may be somewhat powerless against structural issues.

Overall, the Fed’s stance is clear: rather than being troubled by inflation for the long term, it’s better to endure the pain of slowing growth and a slight decline in employment now. The window for rate cuts will not open early; it might even be further delayed.

In this high-interest-rate environment, risk appetite in the crypto market also needs to adjust accordingly. What do you think? Is this tightening policy really for long-term economic health, or is it overcorrecting?