Recent actions by Federal Reserve Chair Powell are indeed worth pondering. On one side, inflation data has clearly been decreasing, yet there is an excessive caution regarding rate cuts. This dilemma is profoundly affecting the rhythm of the crypto market.

Let's first look at the inflation data at hand. The latest US CPI is announced at 2.7%, roughly in line with expectations, but this is not the key point — core CPI has fallen to 2.6%, lower than expected. More importantly, this set of data shows almost no difference from the previous increase. The once fierce inflation momentum has long since faded; now it is at best a slow, moderate rise in prices.

There is a particularly interesting detail. Using the Truflation real-time inflation tool, the actual inflation rate in the US has already fallen below 1.8%. What does this mean? It means it is below the Federal Reserve's official target of 2%. According to conventional logic, since inflation is no longer a problem, the tight grip of high interest rates should loosen — after all, high rates reduce corporate financing costs, and market liquidity is also contracting.

But the reality is that Powell has been hesitant to cut rates. This contradiction is present, and the crypto market is also beginning to fluctuate due to this uncertainty. Many are pondering whether policy will continue to tighten or suddenly shift at some point. This ambiguity in expectations is the root cause of recent market volatility.

From another perspective, inflation has indeed met the target based on data, but from a decision-making standpoint, Powell seems more concerned with avoiding the risk of inflation rebound. This is the current dilemma — data says one thing, policy does another. For us, the key is to understand the logic behind this so we can anticipate the window for future policy shifts.