Powell sends strong dovish signals: the liquidity inflection point may be approaching

#鲍威尔发言 Crypto Market Observation #BNB Hits New High

Last night, Powell's speech clearly shifted to a "dovish" stance —
It not only suggests that the rate cut cycle will continue, but also indicates for the first time that **"the balance sheet reduction may stop in the coming months"**.
This means that the tightening cycle since 2022 may come to an end.
The liquidity turning point is approaching.

Powell specifically emphasized that "the risks of a downturn in employment are increasing."
The tone has clearly shifted from cautious to accommodative.
This releases a core signal:
After inflation is initially controlled, the Federal Reserve is more concerned about economic slowdown and weak employment.
As long as prices do not rebound, a rate cut in October or at the end of the year is almost a high-probability event.

Another key change is that the balance sheet reduction has nearly come to a halt.
In the past, hundreds of billions of assets were reduced each month, but now only about $5 billion in U.S. Treasury bonds remain.
This indicates that the Federal Reserve does not dare to significantly tighten liquidity anymore.
Powell obviously does not want to repeat the "money shortage crisis" of 2019.
The current banking system is tightening funds, and "defensive easing" has become an inevitable choice.

The market reacts quickly:
U.S. Treasury yields have retreated, and the dollar has surged before pulling back,
U.S. stocks and cryptocurrencies strengthened in after-hours trading.
Funds are being priced in advance - the arrival of the Liquidity inflection point.

If the Federal Reserve lowers interest rates by 25 basis points as scheduled on October 30,
That will mark the official shift of monetary policy from "tightening" to "easing."
Risk assets may welcome a new round of cyclical opportunities.

Short-term fluctuations are still present, but the direction is already determined.
The toughest days are about to pass, and new opportunities are approaching.

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When you follow the right people, making money is a natural result.
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