鲍威尔的balance：不过度降息，但会停止缩表

Core Viewpoint - The Federal Reserve is navigating a complex policy environment, balancing inflation control and employment support, with indications that the current tightening cycle may be nearing its end and a shift towards "measured easing" is possible [2][4][5]. Economic Indicators - Current data suggests that employment and inflation trends remain stable, with economic growth slightly stronger than expected, despite signs of labor market weakness such as hiring slowdowns and reduced job vacancies [5][26]. - The core PCE inflation rate is approximately 2.9%, slightly above the beginning of the year, primarily driven by tariff-induced price increases, while housing service inflation is declining [3][25]. Monetary Policy Strategy - Powell indicated that the Fed may soon halt balance sheet reduction, emphasizing the importance of liquidity management to avoid market volatility similar to the 2019 repo market disruptions [4][7][21]. - The Fed's dual strategy involves cautious interest rate cuts and balance sheet adjustments to alleviate liquidity pressures without overly relying on rate reductions [4][9]. Market Reactions - The market is closely monitoring the Fed's signals regarding potential rate cuts and balance sheet normalization, with expectations of one to two rate cuts this year, though internal opinions within the Fed vary [7][9]. - Investors are advised to focus on understanding the balance of policies rather than betting on a single approach, as the Fed's strategy aims to respond to economic realities and manage market expectations [9][10]. Financial Stability - Powell highlighted the critical role of the reserve system, warning that failure to maintain interest payments on reserves could undermine the Fed's control over rates and financial stability [8][24]. - The Fed's balance sheet, which currently stands at $6.5 trillion, is primarily composed of U.S. Treasury securities and mortgage-backed securities, with a focus on maintaining a stable financial environment [13][14].