Everyone, I have just carefully reviewed Powell's speech, and the overall tone is significantly more hawkish than market expectations.

First, he directly prioritized anti-inflation measures and was very firm, emphasizing that inflation is not caused by external factors but is a problem the Federal Reserve must take responsibility for solving, which almost completely closes the room for tolerating high inflation.
Second, regarding the interest rate path, he spoke very plainly, indicating that rate cuts are unlikely, and policy will be data-dependent, not influenced by any political pressure. The market's previous fantasy of politically driven easing is basically shut down.
Third, on balance sheet reduction, he also stated that it will continue and will be substantial, believing that the liquidity released after the pandemic has become seriously excessive, and the balance sheet must keep shrinking. This essentially amounts to draining liquidity from the market, which is clearly unfriendly to risk assets.
Fourth, he mentioned that future communication will be less transparent, including weakening the dot plot and reducing forward guidance, making it harder for the market to pre-price Fed expectations, potentially leading to more sudden and intense macroeconomic volatility.
Fifth, regarding CBDC, he generally holds a negative stance, which is neutral to slightly positive for Bitcoin in the short term, but the impact is limited. The main current contradiction still lies in liquidity.
In summary: liquidity will continue to tighten in the short term, interest rates will stay higher for longer, and market expectations will be harder to pre-price. Therefore, the market reaction is very direct: risk assets will initially decline, and after the new macro path is re-priced, a new direction will be decided. $BTC