The Federal Reserve is about to make significant moves! Chairman Powell revealed several key pieces of information in his latest speech that ordinary investors should pay attention to:

1. The policy framework is changing

The Federal Reserve is reevaluating their monetary policy framework, with a new plan expected to be announced as early as August or September. This adjustment is mainly to respond to the new normal of inflation fluctuating wildly after the pandemic.

2. The inflation target will be adjusted

In the future, the Federal Reserve will have a different perspective on inflation and employment:

- They will not worry about inflation just because the unemployment rate is low

- They acknowledge that inflation is harder to predict now

- Supply chain issues may persist in the long term

3. Hawkish forces are strengthening

Next year, the FOMC voting members will undergo a major change, with 3 out of 4 new members being hawkish. This means:

✓ Interest rate hikes may be more aggressive

✓ Expectations for rate cuts should be lowered

✓ Market volatility may increase

Personally, I feel that this adjustment sends several signals:

- The Federal Reserve acknowledges that the previous approach is no longer effective

- Future policies will be more flexible but also harder to predict

- Investors should prepare for greater volatility

What do you think about this adjustment? Is it a positive or negative development? Feel free to share your thoughts in the comments! If you want to get the latest interpretations of Federal Reserve policies, you can follow me!