The Federal Reserve is unlikely to cut rates, with no suspense there. The key issue is whether they will still dare to backstop expectations of rate cuts. Currently, oil prices are being supported by Middle East tensions, and once there are signs of rising inflation expectations, the Fed's language could easily shift from "inflation is easing" to "uncertainty exists"—and once that change occurs, market expectations for rate cuts will be pulled back. Therefore, the focus is not on the decision itself, but on whether Powell has the courage to continue leaning dovishly.

On the Bank of Japan side, not raising rates also makes sense, but the real risk lies in whether they will hint at an eventual exit from easing policies. Even a slight suggestion could move Japanese interest rates, which would drain global liquidity—many underestimate this impact.

Looking further ahead, Powell mainly influences short-term volatility, but the medium-term expectations are truly shaped by statements from potential successors like Waller. If the hearings lean hawkish, markets will preemptively tighten their outlook; if they lean dovish, the current narrative of "higher rates for longer" will begin to loosen.

In summary: this week is not about standing still, but about appearing to do so while expectations are being re-priced.