Federal Reserve Chair Jerome Powell's speech at Jackson Hole gives dovish signals, but the Fed's mouthpiece commented that facing inflation and a weak labor market, the chances of aggressive rate cuts are low. (Background: Powell's farewell show) Will tonight's Jackson Hole speech signal a Fed rate cut? Beware of severe fluctuations. (Background: Powell's dovish vs hawkish stance at the global central bank meeting on 8/22; Goldman Sachs predicts three rate cuts this year and is optimistic about short-term U.S. Treasury bonds) The U.S. Federal Reserve Chair Jerome Powell will deliver an important speech at the Jackson Hole global central bank meeting this Friday, and his dovish remarks have spurred a collective rally in risk markets. "Restrained easing": cut rates first and observe. However, Nick Timiraos, a journalist known as the Fed's mouthpiece, stated yesterday that Powell's key term is "restrained easing." In other words, rates will be lowered but will remain within the range that restrains inflation, avoiding the market's misconception of an aggressive easing. During the speech, Powell repeatedly emphasized "caution" and "relying on data," also stating that significant rate cuts hoped for by the public are unlikely unless extreme events occur. Labor market and inflation: two opposing forces. Nick further explained that the current dilemma lies in the "peculiar" combination of economic data. The unemployment rate remains low, but both job openings and the number of job seekers have fallen, indicating weakening demand. Powell warned that if demand continues to drop, the deterioration of the labor market could suddenly accelerate. Meanwhile, tariffs have driven up input costs, causing prices to rise again. The wage-price spiral concern has not been alleviated, with Cleveland Fed President Mester reminding that prices "are moving in the wrong direction." St. Louis Fed President Bullard also pointed out that companies are testing consumers' acceptance of high prices. Different voices highlight the difficulty in reaching a consensus and explain why rate cuts must be cautious. Decision-making divisions and external pressures. Fed Governor Waller publicly supported rate cuts last month, believing that "protecting jobs" should be a priority; the other two governors, Mester and Bullard, expressed concerns about sticky inflation and advocated for a wait-and-see approach. This internal division makes Powell's balancing act even more challenging. On Wall Street, some investment banks even propose a "one-time cut of 50 basis points" to stabilize the economy, while others worry that excessive easing will reignite inflation. Political struggles cannot be ignored either. President Trump has repeatedly criticized the Fed for being too slow to react, raising concerns about the independence of monetary policy. American Enterprise Institute economist Michael Strain bluntly stated that Powell's tone is too "dovish" and may underestimate the risk of inflation resurgence, which could force a return to rate hikes in the future, severely damaging the Fed's credibility and even jeopardizing the 2% inflation target. Future path: soft landing or bumpy landing. Powell's main theme is to strive for a soft landing rather than the rapid easing seen last year. Although interest rates are expected to fall, the pace at which mortgage, auto loan, and corporate financing costs decline may not meet investors' expectations. The Fed has not set a clear endpoint, and future meetings will adjust their pace based on changes in inflation, employment, tariffs, and financial market reactions. Overall, Powell has outlined a narrow and winding path for rate cuts at Jackson Hole. If the labor market continues to weaken, the space for rate cuts will open; if tariffs lead to a resurgence in prices, rates may return to restrictive ranges. This "restrained easing" is not only related to the economic outlook of the United States but also affects whether a new wave of capital flows will emerge globally.