The Federal Reserve has released a key signal! Brothers, slow cow officially begins! In order for my brothers to quickly understand, I have compiled the key interpretations of the Federal Reserve's interest rate meeting: one ️⃣ The dot plot of the signal bias eagle: The dot plot shows that the median forecast for interest rate cuts this year is still 2 times (consistent with December last year), but the number of people supporting interest rate cuts more than 2 times this year has decreased from 15 to 11. ·Last time, 10 officials expected to cut interest rates twice, 3 expected to cut interest rates once, and 1 expected not to cut interest rates ·This dot matrix chart: 9 officials expect to cut interest rates twice, 4 expect to cut interest rates once, and 4 expect not to cut interest rates two ️⃣ Rising stagflation uncertainty: The Economic Outlook (SEP) has lowered its 2025 GDP forecast by 0.4 percentage points and raised its 2025 inflation forecast by 0.2 percentage points. The statement 'the risk of achieving employment and inflation targets is roughly balanced' has been deleted and replaced with 'the uncertainty of the economic outlook has increased'. three ️⃣ Delicate slowing down the scale reduction: This meeting was more unexpected when it announced that the pace of scale reduction would be slowed down from April, reducing the monthly redemption limit of US treasury bond from US $25 billion to US $5 billion. Powell emphasized that it is not a change in monetary policy attitude, but a technical adjustment to address the debt ceiling, which may mean a delay in the end of the balance sheet tightening. However, in the current situation, the market may think more. The previous round of the Federal Reserve announced a slowdown in its balance sheet reduction in May 2019, and officially stopped reducing its balance sheet in August 2019. four ️⃣ Carefully arranging the press conference, Powell said four key words to bring confidence to the market: ·No need to adjust policy stance (in the past it was' not in a hurry to adjust ', now it is' no need to adjust', expressing confidence in the economy) ·The impact of tariffs on inflation is temporary (implying that tariffs are not as severe as people imagine) ·Five years later, there will be no inflation story to tell (expressing confidence in inflation) ·If the labor market is weak, we can relax policies when necessary (to give the market some reassurance) Start slowing down quantitative tightening (QT) in April, or prepare for the mid year end of QT. The US Treasury Department may exhaust existing funds and "extraordinary measures" tools around June August, and historically, the US Congress typically approves a new "debt ceiling" at the last minute before depletion; Once approved, the Ministry of Finance's bond financing will drain market liquidity. Brothers, it may be appropriate for the Federal Reserve to end its balance sheet reduction in the middle of the year. If it is too late, the peak of corporate debt repayment may encounter the risk of a significant tightening of liquidity due to the Treasury rebuilding TGA accounts. The Federal Reserve may still be waiting for more compelling reasons to cut interest rates, and future data is more important. Neither employment nor inflation has triggered the conditions for interest rate cuts. In terms of employment, the performance in February was stable, with the six-month moving average of non farm new employment still on the rise, and the JOLTS job vacancies in January were higher than expected. The impact of DOGE layoffs has not yet been reflected in the data. In terms of inflation, the CPI growth rate in February was generally lower than expected, and both commodity and service inflation cooled down. PCE inflation in January was also decreasing, but the Federal Reserve cannot conclude that "inflation has returned to the downward channel". In summary, the current data basically does not reflect the transmission of the impact of Trump's new policies, and it is more important to observe future data. The 'soft data' dropped sharply, but the 'hard data' did not significantly deteriorate. The expectation of a "recession" in the market has recently increased, mainly due to the uncertainty of tariffs and DOGE, which has led to a sharp drop in "soft data", such as the new orders and employment sub items of the manufacturing PMI, consumer survey data from Michigan and consulting firms. Once "uncertainty" is eliminated, "soft data" may also rebound. Therefore, the Federal Reserve may prefer to see evidence of the deterioration of "hard data". The uncertainty of the future has increased. Currently, there are not many Trump tariff policies that have actually taken effect, but a lot of content has been "predicted" to be implemented; The degree of immigration expulsion and DOGE spending cuts are still subject to change. The next key point is in April, when the official announcement of "equivalent tariffs" and the implementation (or cancellation) of tariffs on goods that comply with the USMCA agreement between Canada and Mexico may give the Federal Reserve a clearer idea. Brothers, there are two possible policy paths in the future: a decrease in inflation leading to a rate cut, or a sharp deterioration of the economy leading to a rate cut, both of which are possible. 🚩 Scenario 1: Inflation continues to decline, prompting the Federal Reserve to cut interest rates in Q2. According to the forecast, this requires CPI to remain around 0.2% month on month for the next 2-3 months, and the economy to recover in the second half of the year after interest rate cuts. 🚩 Scenario 2: Stubborn inflation has kept the Federal Reserve focused and interest rates high in the first half of the year. So the probability of a sharp economic downturn and a significant adjustment of BTC in the US stock market among the brothers is not low. In the second quarter, American companies will experience a historic peak in debt repayment, and the average issuance and financing cost of these bonds is relatively low. If the Federal Reserve does not cut interest rates, companies are expected to increase their financial costs by 190BP by extending the current interest rate. And the cash on hand of enterprises has been depleted to pre pandemic levels. If credit risks erupt, it will accelerate economic deterioration and US stock market adjustment, thus triggering the Federal Reserve's "remedial" interest rate cuts. The more chaotic it is now, the more advantageous it is. Brothers, the slow ox has officially begun!