**What signal is hidden in Powell's latest statement?**

The recent remarks by the Federal Reserve Chairman are worth pondering. This time he didn't beat around the bush— the current economy is walking a tightrope: inflation shows signs of rising due to tariff policies, but the job market has already begun to weaken. The unemployment rate has climbed to 4.4%, a height not seen since October 2021.

What’s even more heartbreaking is the employment data for young people. The unemployment rate for college students aged 20 to 24 has skyrocketed to 8.5%, and companies' recruitment needs are also shrinking. What is the current state of the labor market? Companies are not laying off employees, but they are also not hiring—this balance of "low layoffs and low hiring" is actually very fragile.

**What does Powell say about inflation?**

His judgment is relatively optimistic: the recent price increase is mainly due to the "one-time shock" brought about by tariff policies, rather than a persistent inflation. However, that being said, if the supply chain recovery is slow (for example, in the automotive industry), inflationary pressures may last longer.

The key sentence - "Monetary policy has no risk-free path." This is equivalent to acknowledging that the current policy choices are indeed a dilemma.

**Will interest rates still be cut in December?**

The market has voted with its feet: there is an 85% probability that rates will drop. The reason is straightforward—employment data has already provided enough warning signals, with the unemployment rate rising and hiring shrinking.

Another notable point is the tapering action. Powell hinted that the tapering might stop in the coming months, which means that money will no longer be withdrawn from the market. This is a positive signal for liquidity improvement.

**What does this have to do with the crypto market?**

The expectation of interest rate cuts is rising + the possibility of stopping the balance sheet reduction = market liquidity improvement. Coincidentally, recent on-chain data shows that ETH whales are continuously increasing their holdings. When macro policies shift to easing, risk assets often react in advance.

Current interest rate levels Powell himself admits "are still somewhat restrictive", which actually leaves room for future rate cuts. The employment data and inflation trends over the next few months will essentially determine the Fed's pace.