Federal Reserve Chair Powell mentioned in his speech today that the price impact of tariffs may be temporary and is within a reasonable baseline scenario. He particularly emphasized that the current stable unemployment rate environment provides the Federal Reserve with a more cautious operating space, allowing it to maintain patience when adjusting monetary policy.

Powell reiterated that a one-time price increase must not evolve into long-term inflationary pressures, and for this reason, the Federal Reserve has launched a brand new policy framework to enhance flexibility in responding to various economic conditions. At the same time, he also pointed out that there are still certain downward risks in the labor market that need to be closely monitored.

After the speech, market expectations for interest rate cuts further intensified. Traders expect that the probability of the Federal Reserve cutting rates in September has risen from the previous approximately 75% to about 90%, reflecting a significant increase in market expectations for monetary policy easing.