Recently, I came across an interesting perspective on Federal Reserve policies that’s worth noting. Goolsbee recently made a very straightforward statement: if the current inflation rate remains at 4%, then no one should expect interest rates to return to 2%.

This logic is actually quite simple, but many people seem not to have realized it yet. When the inflation rate is at 4%, if the central bank cuts interest rates to 2%, the real interest rate becomes negative, which doesn’t make sense economically. In other words, doing so would be encouraging borrowing and spending rather than fighting inflationary pressures.

So Goolsbee’s point is very clear: as long as the inflation rate remains high, the policy interest rate must stay relatively high. This isn’t a new idea, but given the current market expectations’ confusion, such a reminder is still necessary.

What does this mean for the market? Simply put, those expecting a quick rate cut may be disappointed. The Fed is clearly signaling that as long as price pressures aren’t significantly alleviated, they won’t rush to ease policy. This will impact the bond market, stock market, and cryptocurrencies. Friends who have been watching related assets on Gate should also be observing how these central bank moves influence the market trends.