Summary of the latest speech by FED Chairman Powell:
1️⃣ The Fed is not in a hurry to cut interest rates: The FED will wait for "greater clarity" on the impact of the Trump administration's economic policies before making any adjustments to interest rates.
2️⃣ Uncertainty from new policies: The White House is implementing many major changes in trade, immigration, fiscal policy, and regulation. The FED will monitor the overall impact of these policies on the economy rather than making hasty decisions.
3️⃣ The US economy is in a "good position": Powell has a positive assessment of the economy, stating that the labor market remains "strong" and inflation is approaching the 2% target. However, he acknowledges that the path to reducing inflation is still "bumpy," especially as market sentiment is affected by Trump's tariff proposals.
4️⃣ The jobs report shows a stable labor market: The February report recorded 151,000 new jobs, with the unemployment rate slightly rising to 4.1%. Powell sees this as evidence that the labor market remains "strong."
5️⃣ Inflation remains a risk to monitor: The FED notes that some short-term inflation expectations are rising due to the impact of tariffs. If this trend continues, the FED may have to adjust its policy.
While investors predict that the FED will cut rates three times this year, Powell asserts that the current policy is appropriate and the FED has no specific plans for cuts at this time.