Federal Reserve Board Member Waller recently issued a series of significant viewpoints, triggering intense market volatility. Let's take a look at what these two key signals mean.

**Policy Signals Becoming Clearer**

Waller straightforwardly stated that the current interest rate level of the Federal Reserve has exceeded the neutral rate by 50 to 100 basis points. In other words, the current rates are somewhat excessive. He also added an important condition — as long as inflation prospects continue to ease, rate cuts can become a reality. This sends a clear signal to the market: the rate cut train is already gaining momentum.

**The Employment Market Becomes a Key Variable**

The second point is even more noteworthy. Waller pointed out that U.S. employment growth has basically stalled, the true impact of AI on the labor market is still under observation, and the probability of a secondary acceleration in inflation is very low. Based on these phenomena, the Federal Reserve should continue to push for rate cuts, but the pace needs to be moderate rather than aggressive. Simply put, easing policies will come, but not in a sudden storm.

**Markets Are Already Pricing In Advance**

Once the news broke, the US dollar index fell accordingly. Gold, Bitcoin, and other high-volatility assets strengthened, reflecting the market’s full expectation of improved liquidity. Against the backdrop of a shift in monetary policy, the attractiveness of risk assets is indeed rising. But don’t forget, policy shifts are often accompanied by fluctuations, and short-term zigzag market movements will be the norm.

Grasp the rhythm and understand macro changes through trading logic — this is the correct attitude to respond to liquidity turning points.