The recent remarks by Federal Reserve Chair Jerome Powell have refreshed the market's understanding of the economic pace for next year. He judges that the U.S. economy will remain resilient in 2026, but more importantly, it sends a signal — there is no need for rate cuts in the short term.

From a monetary policy perspective, the Federal Reserve has shifted its stance from "mild tightening" to a level "close to neutral." Powell explicitly states that the current policy framework is "favorable," enough to support a stable labor market while creating room for inflation to return to the 2% target.

However, there is a noteworthy change — in recent months, the labor market has been cooling, and employment risks are rising; conversely, inflationary pressures are easing. This dislocation determines the Fed's subsequent policy options.

What are the specific numbers? Powell expects GDP growth to be in the range of 2.5%-2.75%, neither too fast nor too slow. Regarding the unemployment rate, it is likely to stabilize this year and then gradually decline. Inflation is even more interesting — it is expected to peak in the first half of the year, with a peak between 2.75%-3%, then the annual average will return to 2.5%, and by 2027, it will truly approach the 2% target.

What does this mean for crypto market participants? The stability and gradual pace of Fed policy directly influence liquidity expectations for risk assets. The mild growth outlook and easing inflation pressures give the market a relatively clear policy bottom line — at least in the short term, there will be no aggressive tightening again.