On April 22, Kevin Warsh criticized the U.S. Federal Reserve during a hearing, highlighting its 'lost direction' in attempting to reshape policy frameworks while avoiding key political issues. According to BlockBeats, this has led the market to realize that future monetary policy may involve political risks, affecting interest rates as stable pricing anchors.
Meanwhile, the Middle East situation appears to be cooling but has entered a more challenging phase for pricing. U.S. President Donald Trump extended the ceasefire while maintaining blockades, effectively transforming war into economic suppression. Iran's refusal to negotiate while maintaining readiness indicates that the conflict persists in a different form. Consequently, energy has become a manipulable tool, and inflation is no longer solely under central bank control.
Japan's response to energy and exchange rate pressures has delayed its original interest rate hike schedule, revealing a global issue of 'policy desynchronization.' As major central banks struggle to operate in sync, funds lack a unified direction, becoming dispersed and awaiting clearer signals.
These developments indicate a shift from an era of predictable policies to one of 'credit fragmentation.' The current market lacks trends, showing only volatility and shifts without consensus. Prices are repeatedly redefined rather than continuously changing.
The key question is whether funds trust policies or the inherent risks. If the market regains trust in central banks, liquidity will return, supporting risk assets. Conversely, if the focus shifts to conflict and politics, funds will withdraw, increasing volatility. A prolonged tug-of-war between these forces results in the current cycle of false breakouts and market churn.
The market's future direction depends on three signals being simultaneously corrected: the Federal Reserve's ability to rebuild unquestionable policy credibility, substantive rather than verbal easing in Middle Eastern energy channels, and major central banks returning to predictable policy rhythms. Until these conditions are met, any market movement remains a temporary choice amid uncertainty.