Now, Powell's (Federal Reserve Chair) statement simply means the following 👇
🔹 “The data indicates that growth is better than expected”
This means the U.S. economy is stronger than they had anticipated; growth has not slowed down as some were worried, so economic activity continues.
🔹 “Current policy tools are working well”
This means that the interest rate decisions they are making (raising or lowering rates) are functioning as intended — meaning monetary policy does not need a strong adjustment at this time.
🔹 “Monetary policy is data-driven”
This is a phrase they always use, meaning: they will not make preemptive decisions; everything depends on the numbers coming from the market (inflation, unemployment, growth…).
🔹 “Increased risks in the labor market justify a rate cut in September”
This means that because the labor market has begun to show signs of weakness or slowdown (for example, rising unemployment or fewer jobs), the Fed sees it as reasonable to cut rates in October to ease pressure on the economy.
🟢 In summary:
Powell is preparing the market for the idea of a rate cut coming in October, because the economy is good but the labor market has started to show some strain.
A rate cut usually supports financial markets, gold, and cryptocurrencies as liquidity increases