Fed is very divided, which is not uncommon at an economic turning point. Hard for them to sound hawkish with so much backlogged data yet to come.

Most important data point is the unemployment rate. Fed only expects it to go to 4.5%; if data shows it going to 4.6% or higher, the Fed's tone will change dramatically.

Market thinks the Fed is done and will stay on hold. If unemployment rate continues to tick up, watch out because rates are going to continue to drop.

Powell sounded more optimistic on disinflation, thinks inflation will fall once tariff effects roll out, giving Fed green light to keep cutting.

Recalibration would be a pulling forward of rate cut timing and cutting below where market thinks Fed will stop (~3% nominal).

Fed announced large-scale bill purchases. These are NOT quantitative easing, not designed to remove duration risk or signal future policy.

Must view Fed action in concert with Treasury, which is issuing more at front end (T-Bills), removing duration risk. Fed buying bills complements this.

Quantitative easing was mostly a psychological operation. The combination of Treasury and Fed actions works in that direction, easing financial conditions.