Recently, Federal Reserve Chairman Jerome Powell made a series of remarks that gave people a new understanding of the U.S. economy and monetary policy.
Powell said that the U.S. economy surprised him, not expecting that inflation had come down significantly, that he was deeply surprised by the performance of the U.S. economy, and that the Fed was moving in the right direction. These remarks imply that the Fed may adjust its monetary policy and even rule out a rate cut. This is also in line with market expectations, which also widely expect the Fed to enter the rate cut channel around June next year.
First, Powell highlighted a significant reduction in inflation.
Powell believes that the current level of inflation is already below the Fed's target, which is a positive sign. However, he also pointed out that inflation is still above the Fed's target, so monetary policy needs to remain restrictive to avoid inflation**.
Second, Powell was surprised by the performance of the US economy.
Powell said that although the U.S. economy has underperformed over the past few years, recent employment data and economic growth indicators suggest that the U.S. economy is moving in the right direction. He believes that this shows that the Fed's monetary policy is having a positive effect, but it is also necessary to continue to monitor economic data to determine whether further adjustments to monetary policy are needed.
Finally, Powell said that the Fed is moving in the right direction.
Powell said that the current policy rate is already at a restrictive level, which is hindering the growth of the US economy. As a result, he hinted that the Fed may lower interest rates in the future to boost economic growth. He said the Fed will keep a close eye on economic data and take the necessary steps to support economic growth.
These comments from Powell suggest that the Fed may adjust its monetary policy to boost economic growth. The Fed is widely expected to enter the rate cut channel around June next year, which could have an impact on the global economy and financial markets. When the Fed really cuts interest rates, the dollar index will weaken, the RMB will appreciate, and RMB assets will usher in **, especially the depressed and undervalued A-shares will also usher in the real **.
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