Key points from Powell's speech can be summarized into the following 5 points (personal opinion, not investment advice):
1. Tariff Impact:
• The new tariff policy from the Trump administration exceeds expectations, which will bring “more severe” price pressures and growth slowdown risks to the U.S. economy than previously anticipated a few weeks ago. The scale and duration of these impacts remain uncertain, but tariffs may push prices higher again in the coming quarters.
2. Monetary Policy Stance:
• In a highly uncertain outlook, the Federal Reserve needs to wait for clearer information before considering adjustments to its policy stance. The current inflationary base remains relatively high, and hasty easing could prolong the time inflation remains elevated, so the Federal Reserve needs to be cautious in adjusting policy.
3. Economic Situation Assessment:
• The U.S. economy and employment situation remain robust, but consumers and businesses have become “more pessimistic” about future expectations. Hard data indicates that U.S. economic growth will slow, but the growth outlook remains solid.
4. Views on Inflation:
• The Federal Reserve is obligated to anchor inflation expectations and must ensure that price increases do not lead to inflation. Although inflation has significantly declined recently, new tariffs may alter this trend.
5. Views on Economic Recession:
• Powell did not directly discuss the possibility of a recession, but he acknowledged that the uncertainty brought by trade policy is dampening business confidence, while multiple forecasting models have shown that the risk of the U.S. entering a recession in the next year is increasing.
Overall, Powell's speech indicates that the Federal Reserve is currently maintaining a cautious attitude in the face of economic uncertainty brought about by tariff policies and is taking a wait-and-see approach to monetary policy adjustments. His remarks have also somewhat influenced market expectations for a Federal Reserve rate cut.