hawkish

According to Jinshi News, Goldman Sachs Asset Management analyst Kay Haigh stated that there are some preliminary signs of a tightening labor market, but there is still a long way to go before it is fully tightened.Given the economy's continued performance exceeding expectations, the FOMC's focus will shift to the inflation situation. Goldman Sachs still believes there is room for two more rate cuts from the Federal Reserve this year; however, if the CPI released on Friday unexpectedly rises, it may push the Federal Reserve towards a more hawkish stance.

According to Jin Ten, during the Asian trading session, the Singapore dollar against the US dollar maintained a sideways consolidation, but the prospect of the Federal Reserve possibly keeping high interest rates for a longer period may put it under pressure.Analysts from CIMB International Treasury and Market Research pointed out that, given inflation remains high, Federal Reserve Governor Bowman and Richmond Fed President Barkin have both signaled that further rate cuts may take longer.

According to Jinshi News, Chris Grisanti, Chief Market Strategist at New York MAI Capital Management, stated that today's Federal Reserve statement and press conference are clearly hawkish. The description of economic activity was upgraded from "moderate" to "robust," while the wording regarding downside risks to employment was removed. Powell indicated that the labor market has "stabilized," and although inflation is stabilizing, it remains "slightly elevated." He believes that there will be no rate cuts in the short term, and under continued economic strength, there may not be any rate cuts even in 2026.

According to CoinDesk, the market widely expects the Federal Reserve to maintain interest rates this Wednesday.The key focus of this meeting is the statement from Fed Chairman Powell during the post-meeting press conference, as his remarks may provide directional guidance for risk assets, including Bitcoin. The core concern for the market is whether this pause in rate cuts will be interpreted as a "hawkish pause" or a "dovish pause." If Powell emphasizes inflation risks, it could dampen rate cut expectations and put pressure on risk assets; conversely, if he suggests that the pause in rate cuts is temporary and opens the door for resuming cuts in the coming months, it could boost risk assets like Bitcoin.Additionally, if officials appointed by Trump cast dissenting votes on the decision to maintain interest rates, it could strengthen market expectations for future easing policies. Powell's explanation for the decision to maintain rates may provide support for the dollar, thereby putting pressure on Bitcoin priced in dollars. He may also be asked about the Trump administration's recent housing affordability measures (which could raise short-term inflation), the judicial investigations targeting him personally, and the bond market volatility triggered by Japan, as these statements could exacerbate market fluctuations.

After the U.S. Department of Justice launched an investigation into Federal Reserve Chairman Powell, the situation began to change in a direction contrary to Trump's expectations. The probability of Powell remaining in his position until 2028 after his term ends in May has started to rise, while the chances of the more hawkish candidate for the next chairman, Warsh, have begun to surpass those of Hassett. Trump may find himself in a year-long game with the Federal Reserve.Polymarket data shows that shortly after Powell released a video responding to the investigation on January 11, the probability of him leaving the Federal Reserve Board by the end of May and by the end of the year both plummeted. Currently, bettors believe the probability of Powell leaving the Federal Reserve by May 30 has dropped from 74% earlier this month to 45%, and the probability of him stepping down by the end of the year has decreased from 85% to 62%.The prediction market has also adjusted its expectations for Trump's ally Kevin Hassett being nominated to succeed Powell as Federal Reserve chairman. Before and after the news of the U.S. Department of Justice investigation broke, the more hawkish candidate Kevin Warsh began to gain support over Hassett in Polymarket.Policy analyst Dan Clifton stated that since last summer, there has been an informal agreement between Trump and Powell—if Powell agrees to leave the Federal Reserve when his term ends in May, Trump would not challenge the Federal Reserve's multi-billion dollar renovation project. Trump had previously harshly criticized the renovation plan, but his criticism of the Federal Reserve has diminished in the second half of last year. This bottom line was broken last Sunday, making it more likely for Powell to remain at the Federal Reserve as an ordinary board member. By continuously attacking Powell personally, it is likely to end up being a futile effort.

According to Jinshi News, UBS Chief Economist Paul Donovan wrote that a criminal investigation against the sitting Federal Reserve Chairman could actually help strengthen the independence of the central bank. Market reactions indicate that investors' concerns about the Fed's ability to manage interest rates without political interference are rising. Although asset prices are generally stable, long-term U.S. Treasury yields are rising, and the dollar is weakening. Donovan stated that Powell's tough stance may suggest he is unwilling to resign from his position as a Federal Reserve Governor this year.

Beth Hammack, president of the Cleveland Fed, stated that after the Federal Reserve's consecutive interest rate cuts in the past three meetings, she sees no need for any adjustments in the coming months.Hammack opposes the recent rate cuts due to her concerns about persistently high inflation, which outweigh her worries about potential vulnerabilities in the labor market—concerns that have led officials to cut rates by a cumulative 0.75 percentage points over the past few months. Hammack is not a voting member of the Federal Open Market Committee (FOMC) this year but will gain voting rights next year.Hammack hinted that the Fed does not need to adjust its current benchmark rate, which is in the range of 3.5% to 3.75%, at least until next spring. She stated that by then, the Fed will be better able to assess whether recent inflation in commodity prices is subsiding as the impact of tariffs is more fully digested in the supply chain. (Jin Shi)

The Governor of the Bank of Japan, Kazuo Ueda, stated at a monetary policy press conference this afternoon Beijing time that the Japanese economy is somewhat weak but is gently recovering. If the economy and prices develop as expected, and with the improvement of the economy and prices, the Bank of Japan will continue to raise the policy interest rate.After this rate hike, Japan's benchmark interest rate has risen from 0.50% to 0.75%, marking the highest level since 1995 and officially signaling Japan's departure from the era of extremely low interest rates that lasted for 30 years. In response, Ueda said, "The short-term interest rate being at a 30-year high has no special significance, and we will closely monitor the impact of the latest interest rate changes."Regarding future plans, Ueda stated, "The pace of monetary adjustments will depend on the economic, price, and financial outlook. There is still a certain distance to the lower bound of the neutral interest rate range. Currently, we do not see the strong tightening effects that previous rate hikes produced. We will decide whether to raise rates again after assessing the impact of the increase to 0.75% on the economy and prices. If wage increases continue to be transmitted to prices, a rate hike is indeed possible."

According to Jinshi, Fed's Goolsbee stated that the stance on next year's interest rates is not hawkish, and he is optimistic about the decline in interest rates this year, but he is uneasy about a significant loosening of policy too early.

According to Jinshi reports, the CICC research report states that the Federal Reserve is expected to cut interest rates by 25 basis points at the December meeting, but the number of officials opposing the rate cut has increased to two, indicating that the threshold for further rate cuts is rising. Powell's statements are not strong, and the Federal Reserve announced that it will initiate short-term Treasury bill purchase operations, easing market concerns. Looking ahead, it is expected that the Federal Reserve may continue to cut rates in 2026, with the next rate cut possibly in March.

According to Jin Ten, Goldman Sachs analyst Kay Haigh stated that the Federal Reserve has reached the end of "preventive rate cuts." She believes that the labor market data must weaken further in order to justify additional recent easing measures. The "hard dissent" from voting members and the "soft dissent" appearing in the "dot plot" highlight the hawkish camp within the Federal Reserve, and the reintroduction of language regarding the "magnitude and timing" of future policy decisions in the statement is likely aimed at soothing them. While this leaves the possibility for future rate cuts, the weakness in the labor market must reach a higher threshold.

According to Jinshi reports, Michelle, the head of JPMorgan's Global Fixed Income division, stated that the Federal Reserve's economic forecasts seem to lean towards a hawkish stance.

According to Jinshi reports, the head of U.S. interest rate strategy at Societe Generale, Rajapa, stated that a "hawkish rate cut" is expected.

According to Jin Ten, the Federal Reserve is expected to lower the benchmark interest rate at this week's meeting, but this rate cut may have a "hawkish" tone. Traders at JPMorgan pointed out that, first, the dot plot shows that the Federal Reserve expects to cut rates only once next year; second, Federal Reserve Chairman Powell emphasized that concerns about inflation still exist and has not committed to further rate cuts.

According to Jin Shi reports, former Federal Reserve Vice Chair Brainard stated in an interview that if she attends the upcoming FOMC meeting, she may choose a hawkish rate cut.She pointed out that in the absence of official data, she would refer to non-government data sources for employment data. Brainard is inclined to cut rates once more and is committed to bringing inflation down to 2% within the next two years. She emphasized that for Americans, the top priority is inflation and prices.

According to Jinshi News, Paul Eitelman, Senior Director and Chief Investment Strategist at Russell Investments, stated in a report that the Federal Reserve is expected to implement a "hawkish" rate cut of 25 basis points, with a terminal rate anticipated to be between 3.25% and 3.5%.Eitelman pointed out that the current yield on the 10-year U.S. Treasury is 4.1%, which is above Russell Investments' fair value estimate, supporting a strategic allocation of duration risk in the portfolio.

According to Jinshi reports, analysts at Bank of New York Mellon pointed out in a report that the market has fully digested the expectation of a rate cut by the Federal Reserve this month, but there is an increasing consensus that this will be a hawkish rate cut. Further monetary easing will depend on whether the economic data released in March and June 2026 shows weakness or whether inflation continues to decline.The analysts also mentioned that the upcoming change in the Federal Reserve chair poses a risk, and the market will assess the policy tendencies of the new leadership. In addition, the FOMC will release the dot plot, and it is expected that there will be significant divergence among committee members regarding the policy direction for 2026, reflecting the dual economic risks.

According to Jinshi News, Mediolanum International Funds analyst Daniel Loughney stated that he expects the Federal Reserve to lower the federal funds target range by 25 basis points next week, driven by weak labor market statistics. He noted that the recent rate cut is seen as a hawkish cut, but the weak labor market may lead to a more dovish response. The key focus will be on the dot plot and the FOMC's quarterly economic projections summary, from which market participants will look for any shifts in the Fed's sentiment.

Bitcoin has experienced its worst week of the year, dropping over 30% from last month's peak.Deutsche Bank analysts pointed out the following five main reasons: market risk aversion, hawkish signals from the Federal Reserve (a rate cut in December is not guaranteed), stagnation in cryptocurrency regulation and the slowdown in the progress of the U.S. Senate's "Digital Asset Market Transparency Act," outflow of institutional funds (large investors are withdrawing their capital), and long-term holders taking profits, with early holders cashing out their gains.