FED Chairman Jerome Powell gave critical messages for the markets in his speech today. Analyst YT Jia evaluated Powell's statements and summarized the main message of the speech as “Quantitative Tightening (QT) is ending” and stated that this is one of the most important macroeconomic turning points of the year. YT Jia noted that over the past two years, the Fed has tightened liquidity in two ways, both by raising interest rates and shrinking its balance sheet. However, he stated that Powell's clear signaling that QE would be halted sent a message to the markets that “the liquidity squeeze is over.” Jia noted that while this doesn't directly translate to quantitative easing (QE), its impact is similar, with the US dollar supply now shifting from a constant decline to a stable level. He added that this represents a shift from negative to positive for risk assets. The analyst noted that Bitcoin and the cryptocurrency market are particularly sensitive to such policy shifts and typically react proactively. Jia also found Powell's emphasis on the resilience of the US dollar system significant, noting that this implicitly acknowledges the legitimacy of stablecoins as a conduit for global dollar flows. YT Jia stated that the cryptocurrency market will be directly affected by the slowdown in liquidity tightening and the green light given to stablecoins. The analyst predicted that FFAI's Dual-Flywheel strategy (EAI + Crypto) will gain momentum in the new environment, and capital will be directed towards both technology and the highly resilient crypto market. Jia concluded his assessment by saying, “Everything we expected is now on its way.” *This is not investment advice.
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