Musaleem speaks tonight: The Federal Reserve sticks to the 2% inflation target, crypto market volatility imminent

Mosalem, as the St. Louis Fed President and a 2028 FOMC voting member, will deliver a speech tonight at 23:00, reaffirming the Federal Reserve’s commitment to restoring inflation to the 2% target. This statement is significant because on the same day in the morning, Williams has already signaled a hawkish stance, and the US December CPI data was released at 21:30. The confluence of these signals may lead to increased market volatility.

What is the Fed’s inflation target about

The 2% figure seems simple but is actually the core anchor of the Fed’s monetary policy. The Fed sets its inflation target at 2%, which is neither too high (high inflation erodes purchasing power) nor too low (low inflation risks falling into a deflation trap). Mosalem’s statement “committed to restoring inflation to 2%” is effectively conveying a key signal: the Fed has not yet completed its inflation management task, and subsequent policies will not shift hastily.

Policy divergence in the same day’s officials’ speeches

Interestingly, within the same day, Fed officials’ stances show subtle differences:

Williams’ hawkish stance emphasizes current economic conditions, while Mosalem focuses on the long-term goal of inflation decline. This difference in language reflects internal divergence within the Fed regarding the policy pace: hawks believe longer periods of high rates are necessary, while doves stress the determination to control inflation.

CPI data is out, what to watch next

The US December CPI data was released today at 21:30, providing important context for Mosalem’s speech. CPI data will directly influence market expectations of the Fed’s policy path: if inflation exceeds expectations, rate cut expectations may rise, benefiting risk assets; if the data is disappointing, it will reinforce Mosalem’s “more effort needed” stance, possibly strengthening the dollar and suppressing risk assets like Bitcoin.

Practical impact on the crypto market

Mosalem’s speech and the multiple statements from officials on the same day ultimately point to one question: when will the Fed start cutting rates? According to the latest news, market judgments on the rate path remain divided, and officials’ speeches will be a key source of signals. For the crypto market, this means:

• If officials signal hawkishness, the dollar appreciates, and risk assets like Bitcoin face pressure
• If dovish signals are released, liquidity expectations improve, and crypto assets may gain support
• Market volatility often rises during data releases and speeches; short-term trading should be cautious

Summary

Mosalem’s speech tonight essentially emphasizes the Fed’s determination to manage inflation, but whether this resolve will be maintained depends ultimately on upcoming CPI data. The policy divergence among multiple Fed officials on the same day reflects internal disagreements over the policy pace. For crypto investors, the key is to closely monitor whether officials’ comments will alter market expectations for rate cuts and how such expectations influence risk asset pricing. Currently, the market is in a period of dense policy signals, and increased volatility is normal; prudent position sizing and stop-loss placement are especially important.