Trump's tax cut policy has exacerbated the debt problem in the United States. Reports indicate that there will be an additional $3.8 trillion deficit over the next decade, and by 2035, the debt-to-GDP ratio may exceed 118%.

Although Powell did not say it directly, the implication is that the issues facing the U.S. economy cannot be solved solely by the Federal Reserve; it also depends on how the government handles debt and policy.

Powell's speech was referred to by the media as a "confession statement" because he acknowledged past policy shortcomings. However, since his term is nearing its end, he may not want to stir up too much trouble, which is why he is speaking cautiously. He stated that these adjustments would not affect current interest rate decisions, and the results will not be announced until August or September.

Now, the market is speculating whether the Federal Reserve will lower interest rates, but no one dares to make any guarantees. If inflation data is slightly higher, they may continue to wait; if economic data is poor, they might really cut rates.

The economy of country M is currently like walking a tightrope, balancing high debt and high interest rates while also managing employment and inflation. Powell mentioned that this is not something that monetary policy can resolve, but as the Chairman of the Federal Reserve, he can only try to prevent the tightrope from breaking.

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