Core Points - The primary motivation for Powell to halt the balance sheet reduction is to prevent a liquidity crisis in the financial markets [1] - Powell indicated that signs of tightening liquidity conditions are emerging, including a general rise in repo rates and more pronounced temporary pressures on specific dates [2][15] - The Federal Reserve's long-term plan is to stop the balance sheet reduction when bank reserves are "slightly above" what is considered "adequate" [15][17] Group 1: Liquidity and Market Rates - SOFR (Secured Overnight Financing Rate) is a key short-term interest rate mentioned by Powell, representing the average rate for overnight repo transactions secured by U.S. Treasury securities [5][6] - The current Federal Funds Rate (FFR) is set between 4.00% and 4.25%, with the ON RRP (Overnight Reverse Repo Rate) at 4.00% and IORB (Interest on Reserve Balances) at 4.25% [8][9] - The mechanism of the Federal Reserve's interest rate corridor is designed to keep market rates, including SOFR, within this range, but temporary breaches can occur if bank reserves are insufficient [11][12] Group 2: Historical Context and Risks - A similar liquidity crisis occurred in September 2019, when the SOFR jumped from 2.2% to 5.25% due to a sudden drop in bank reserves, leading to a freeze in repo transactions [14] - Powell's remarks reflect a desire to avoid repeating the 2019 crisis, where the Fed had to intervene urgently to restore liquidity [15] - The potential for a systemic risk arises if the balance sheet reduction continues beyond the target level, leading to overly scarce reserves [17] Group 3: Employment and Economic Conditions - Powell noted an increase in downside risks to employment and described the labor market as "slightly weak," indicating a need for a more neutral policy stance [18][19] - Halting the balance sheet reduction is seen as a preventive measure to provide a stable financial environment, especially as the economy shows signs of fatigue [19] - The Fed's cautious communication regarding balance sheet operations aims to manage market expectations and avoid unnecessary volatility [22]

花旗：美联储应当考虑换用SOFR为新的政策利率，从而取代现行联邦基金利率。 来源：滚动播报 ...