Powell points to market reaction to monetary policy: traders now estimate a 90% chance of a Federal Reserve interest rate cut in September, up from 75% before Powell's remarks.
A shift in traders' estimates for interest rate cuts in September
Key takeaways from Powell's speech:
Employment risks are increasing, indicating a weakening labor market.
The Federal Reserve may need to adjust its monetary policy as the risk balance changes.
The flexible inflation targeting framework is being abandoned.
Powell warned that stable inflation expectations cannot be taken for granted.
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