Bitcoin plunges, has the attitude of the Federal Reserve changed again?

On the early morning of March 23rd, under pressure, Federal Reserve Chairman Powell announced a 25 basis point rate hike. Although Goldman Sachs predicted that the outcome of "no rate hike" would fall through, the result was roughly in line with market expectations. However, Powell's subsequent speeches and Q&A sessions were shocking, making it difficult for the market to continue to define his comments as "dovish", and Bitcoin fell more than 5% in response. BlockBeats has compiled and translated his main remarks as follows:

TL;DR

The Federal Reserve believes that high interest rates and slow growth are dragging down businesses.

· Confirming that the turbulence in the banking industry will affect the economy and policy decisions.

· Considering not raising interest rates, but the decision to raise interest rates has received strong support.

· Participants believe that there will be no interest rate cut this year.

· The balance sheet boosted by the emergency loan program only reflects the short-term and is unrelated to monetary policy.

The following is the original text of the speech (in chronological order).

Confirm high interest rates and credit tightening environment

"Higher interest rates and slower growth are dragging down businesses, and almost all FOMC members believe that the risks facing economic growth are mainly downward. Currently, inflation expectations seem to be well controlled."

The Federal Reserve is continuing to significantly reduce its balance sheet, but we believe that recent events in the banking industry will lead to even tighter credit conditions, which will affect the economy and the measures we need to take in response. Recent economic indicators have been stronger than expected, and we will use this as a basis for our decisions, closely monitoring upcoming data and the actual and expected impact of tightening credit conditions, making decisions at each meeting.

"A few banks have encountered serious difficulties, and the Federal Reserve, the Treasury Department, and the Federal Deposit Insurance Corporation have taken decisive action earlier. Depositors' savings are safe, and the Federal Reserve's lending program effectively meets the banks' needs and demonstrates that there is sufficient liquidity available. We will also learn from this event, continue to closely monitor the situation, and be prepared to use all tools to ensure the safety and soundness of the banking system."

Response to rumors of "no interest rate hike" and "interest rate cut"

"The Federal Reserve has considered pausing (raising interest rates), but raising interest rates has received strong consensus support. The necessity of further interest rate hikes will be based on the actual and expected impact of credit tightening, and a banking crisis may only have a moderate impact."

The participants believe that there will be no interest rate cut this year, and SVB's bankruptcy is an exception. There are no widespread weaknesses in the banking system. A rate cut this year is not our basic expectation. In the end, we will take sufficient measures to bring inflation down to 2%; tighter credit conditions can replace rate hikes.

If we need to raise interest rates higher, we will do so. We do not consider providing insurance for all unprotected bank deposits.

"Although the liquidity provided recently has increased our balance sheet, the intention and impact are different. The expansion of the balance sheet reflects short-term loans, and the recent expansion of the balance sheet is unrelated to monetary policy."

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