Summary of the Federal Reserve's Speech Last Night

Still keeping interest rates unchanged like last time

The market was not affected

The Federal Reserve has held steady for the third consecutive time, emphasizing that the uncertainty of the outlook has increased further, with rising unemployment and inflation risks having both escalated. The S&P 500 index briefly dipped, ultimately closing up 0.43%.

As the market expected, Powell continued to emphasize the current economic environment is fraught with uncertainty during the press conference, stating that the Federal Reserve needs to remain patient and wait (he said 'Wait and see' 11 times throughout). In the context of soft data and hard data continuing to diverge, he tends to rely more on the latter, pointing out that current hard data still reflects a robust performance of the U.S. economy (tariffs boosting import surges will make GDP data difficult to interpret accurately, and consumer spending and inventory may be revised upward).

When asked about the question of whether to address employment or inflation first, Powell reiterated that it is still too early to draw conclusions, but a trade-off may have to be made.

As for the interest rate cuts repeatedly urged by Trump, Powell responded that 'we cannot act preemptively' and emphasized that Trump's calls will not influence the Federal Reserve's work. Regarding the fact that the two have not met since Trump's second term, Powell said he would not request a meeting proactively; it should be initiated by Trump.