Overall, the journalists' gossip questions are likely to be more than the current inflation questions, but Powell clearly is unwilling to answer any gossip questions, including whether he will continue to serve as a governor after resigning as Chairman of the Federal Reserve. This is the first time in the Q&A session I have listened to for so long that Powell did not answer the first five questions, including one from Nick.
In other questions, I mainly want to know whether we will enter a rate cut phase next. Personally, I feel that Powell is still quite dovish, with almost no hawkish remarks. When a journalist asked whether he would consider raising interest rates if the labor market remains unchanged but inflation continues to rise, Powell's response was still that this is not currently on the discussion table. This question comes up almost every time, and Powell's answer is always the same.
Although the upcoming interest rate adjustment path has not been explicitly stated, Powell did not directly deny the possibility of a rate cut next time as he did in the last two instances. Instead, he mentioned that decisions will be based on data, which is a relatively dovish response. He also indicated that if the labor market declines, the Federal Reserve will consider rate cuts more seriously. Moreover, he believes that the decline in the labor market is closely related to immigration policy.
In this meeting, I personally feel that Powell is 'Yin-Yang'ing Trump. Firstly, the downside risk of labor data could bring about an economic downturn, and the main reason for this is immigration. Everyone knows that this is one of the most forceful policies after Trump took office, aside from tariffs.
Secondly, he believes that if there were no tariffs, the Federal Reserve would have already entered a full rate-cutting cycle by now. It is the tariffs that have led to a new round of inflation increase. Without tariffs, current inflation would be very close to 2%. Of course, Powell also thinks that if the tariffs do not continue to have unforeseen issues, we might see the peak impact of tariffs on inflation around mid-2026, meaning inflation should start to decline.
Other than that, there is not much else. Powell is still very rational, and what he says is within the expected template. He remains committed to maintaining a 2% inflation target without wavering, determining the next interest rate adjustment based on data, without making any forecasts. However, Powell briefly mentioned his advice regarding the future candidates for the Federal Reserve Chair, which is to avoid political elections and maintain the independence of the Federal Reserve.
Overall, the impact of this meeting on the market is not significant.