The term "re-calibration" sounds much better than "recession".

The U.S. stock market soared on Thursday, September 20, with the Dow Jones Industrial Average crossing the 42,000-point mark for the first time, and the S&P 500 index reaching a new closing high. The day before, Federal Reserve Chairman Powell used the term "re-calibration" multiple times to explain the decision to cut interest rates by 50 basis points, marking the beginning of a new easing cycle.

"We know it's time to re-calibrate our policies in light of the progress of inflation and the transition of employment to a more sustainable level, so the balance of risks is now balanced," Powell explained the Fed's decision to reporters on Wednesday. Despite a slight pullback in the stock market on Wednesday after much discussion, it rebounded strongly on Thursday.

In light of the Fed's decision, analysts and commentators have mentioned the term "re-calibration", and the Fed's shift to a more neutral stance is seen as the main reason for the global stock market rally on Thursday.

L. Thomas Block, a Washington policy strategist at Fundstrat Research, said this seemed to be the "keyword" of Powell's remarks that day.

Jose Torres, Senior Economist at Interactive Brokers, pointed out in a report that despite what seems to be a bearish sentiment in the market after Powell's press conference on Wednesday, the Fed Chairman's description of the policy shift has boosted the confidence of bullish market participants.

"Since the global financial crisis, the Fed has undoubtedly been a reliable partner for bullish investors, calming volatility under the guise of financial stability while creating further upward potential for asset prices, including property, stocks, and bonds," he wrote.

Jim Baird, Chief Investment Officer at Plante Moran Financial Advisors, stated in an email comment that Powell's tone and wording emphasized that this decision reflected a reassessment of the situation. The Fed's latest economic forecasts also reflect this reassessment, with inflation declining faster than expected and the increase in the unemployment rate exceeding the forecast for June.

"Whether the Fed can accurately grasp the timing and land smoothly remains to be seen, but the message conveyed by policymakers - that the path of interest rates has not been locked in advance - is an important signal to the market," Baird said.

Nicholas Colas, co-founder of DataTrek Research, said, "'Recalibration' is the key word for Powell that day, and he put forward a credible argument that seems to convince investors that this larger-than-normal interest rate cut is part of a mid-cycle adjustment rather than a precursor to an economic recession."

"The 'slow and steady' pace of interest rate cuts conveyed by Powell may disappoint some, but it addresses concerns that a 50 basis point cut is related to the rapid weakening of the U.S. economy," Colas wrote. "This may be the sole objective of his (Wednesday) press conference, and we believe he has succeeded."