Powell’s message today is clear:

The Fed is standing at a crossroads not between hikes, but between holding and cutting rates.

• A rate hike is nobody’s baseline.
• Some members want to stay on hold; others see room for one or more cuts.
• Labor market is cooling gradually, not collapsing.
• Inflation is easing, especially in services.
• Treasury bill purchases are being pulled forward to secure liquidity before tax season.

This is a rare moment where both goals controlling inflation and preserving employment are in tension.

Bottom line:
The Fed is preparing for an eventual shift toward easing, not tightening.