On Thursday, November 7, the Fed cut interest rates as scheduled by 25 basis points, lowering the target range for the federal funds rate to 4.5%-4.75%, but the decision statement removed the expression of confidence in tackling inflation issues, or implied an open attitude towards pausing rate cuts in December.

At 2:30 p.m. local time in the Eastern United States, Federal Reserve Chairman Powell attended a press conference, praising the strong overall performance of the US economy, acknowledging the continued cooling of the labor market and "inflation data higher than expected," and explicitly stating that the Federal Reserve will continue to cut interest rates.

The market is focusing on whether he will reveal more meaningful clues about the future interest rate path, whether he will comment on the impact of the US presidential election on the US economic outlook, and the potential impact of Trump's tax cuts, tariffs, and spending plans on the Federal Reserve's future policies and regulatory system.

Opening remarks: The labor market is not a significant source of inflationary pressure. If inflation cools and the economy remains strong, rate cuts can be slower.

In the prepared opening statement, Powell stated that improvements in supply conditions have supported the strong performance of the US economy over the past year, and the Federal Reserve has made significant progress in achieving its dual goals of full employment and price stability. The economy and labor market remain robust.

He pointed out that the pace of job creation has indeed slowed down earlier this year, with an average of 0.104 million new jobs added each month over the past three months, but it may have been temporarily affected by strikes and hurricanes in October. The unemployment rate is significantly higher than a year ago but has declined in the past three months:

"Overall, a series of broad indicators indicate that the tightness of the labor market has eased compared to before the outbreak of the epidemic in 2019. The labor market is not a significant source of inflationary pressure."

When evaluating inflation, he stated, "The inflation rate has dropped significantly over the past two years," with the September PCE price index increasing by 2.1% year-on-year, closer to the central bank's long-term target of 2%, but the core PCE increased by 2.7% "still slightly high," however, long-term inflation expectations seem to remain stable.

He emphasized that the Federal Reserve, when "gradually transitioning to a more neutral stance," does not have a predetermined path and will make "dynamic decisions" at each meeting based on data, evolving outlook, and risk balance, as cutting rates too quickly may hinder cooling of inflation, while reducing rates too slowly may overly weaken economic activity and employment:

"If the economy remains strong and the inflation rate does not continue to move towards 2%, we can reduce policy constraints more slowly (note: slower rate cuts). If the labor market unexpectedly weakens, or if the inflation rate declines faster than expected, we can act more quickly.

Powell: Trump cannot fire or demote me, the upcoming election has no impact on monetary policy in the short term, and does not rule out slowing rate cuts.

During the Q&A session, the media first focused on whether Powell can 'smoothly retire' during Trump's second presidential term.

Powell, who has been asked too many times, repeatedly stated that he does not want to answer too many political topics. However, he bluntly stated that even if Trump asks him to resign from the position of Federal Reserve Chair, he will not comply, and the law does not allow the U.S. President to dismiss or demote senior Federal Reserve officials.

Earlier that day, it was reported that Trump may let Powell continue to lead the Federal Reserve until the end of his term in May 2026. During Trump's presidency, he frequently criticized the Federal Reserve and Powell, claiming that the speed of monetary policy easing was not fast enough, hindering U.S. economic prosperity. In October, Trump also stated that the U.S. President should have the right to participate in interest rate decisions and have the right to comment on whether rates should be raised or lowered.

Powell also explicitly mentioned that the upcoming U.S. elections will not affect monetary policy in the short term, and the Federal Reserve will not 'speculate, surmise, or assume the fiscal policy and its potential impact on the economy'.

He mentioned today that after the rate cut, "policies still have restrictions," combined with his mention that "the fight against inflation is not over," and the fact that the Fed is closer to the neutral interest rate track, it can be inferred that he is hinting that the Fed will continue to cut rates.

However, the Fed in the policy statement opened up the possibility of pausing rate cuts, and Powell also stated that it is not necessary to further cool inflation in order to maintain price stability. "As we approach the neutral interest rate, it may be appropriate to slow the pace of rate cuts."

He also reiterated, "The Fed is not in a hurry to achieve the neutral interest rate," and issued a warning that any changes in the government could affect monetary policy at a time when the Fed seeks to lower rates: "In principle, any U.S. government policies or policies enacted by Congress may have economic effects over time, thus, along with countless other factors, these economic impact forecasts will be integrated into the Fed's economic model and taken into account."

"In principle, any U.S. government policies or policies enacted by Congress may have economic effects over time, thus, along with countless other factors, these economic impact forecasts will be integrated into the Fed's economic model and taken into account."

After Trump's victory, the market has lowered its expectations for a rate cut in January next year. The more mainstream view is that there may be a pause in rate cuts by then, with the probability increasing from 44% a week ago to 54%, and the probability of another 25 basis point rate cut in December decreasing slightly from 77% to 67%.

Some analysts point out that Trump's victory has sparked speculation that the Fed may cut rates at a slower, more gradual pace, as policies to restrict illegal immigration and implement new tariffs could push up inflation. This has also led to discussions on what the Fed considers to be the "neutral rate" that does not restrict or stimulate economic growth.

What else was said: There will be more data before the December meeting, and a soft landing is still possible. The U.S. deficit and fiscal policy are economic headwinds.

During the Q&A session, Powell also mentioned that the job market has not fully stabilized, the U.S. labor market continues to cool, but the pace is "very slow." The business community believes that the economic situation in 2025 will be better than this year, but geopolitical risks are high. Wage growth remains slightly above the level consistent with the 2% inflation target: "We are still moving towards a more neutral position, the key is the right pace."

When talking about inflation, he admitted that "there is a piece of inflation data slightly higher than expected", but it does not make him worry about the economy.

"Overall, we are optimistic about economic activity. At the same time, we received a report on inflation, which, although not very bad, is indeed slightly higher than expected.

However, by December, we will have more data, such as an employment report, two inflation reports, and a large amount of other data, and we will make decisions at the December meeting.

He also reiterated that the Fed still believes in achieving a “soft landing,” "we believe we can combat high inflation while achieving strong employment," and Americans' long-term inflation expectations remain well anchored.

When discussing the 10-year US Treasury yield soaring more than 70 basis points since the Fed's significant rate cuts in September, Powell believes that the rise in Treasury yields is mainly driven by economic growth, rather than monetary policy:

"It is too early to judge the trend of US Treasury yields now; it seems that the bond trend is not dominated by inflation higher than expected, as economic activity data has always been stronger than expected.

At the same time, the rise in US Treasury yields is also inevitably related to the prospect of the Trump administration issuing a large amount of debt in the future and causing the fiscal deficit to become even larger. Powell bluntly stated that the continuous rise in the US deficit and the overall fiscal policy remain economic obstacles, and the scale of federal debt is unsustainable:

"Our level of debt relative to the economy is not inappropriate but rather this path is unsustainable. In a situation of a huge deficit, currently in a full employment situation, and it is expected to continue, so solving (the fiscal deficit) issue is important, this ultimately poses a threat to the economy.

鲍威尔实现准备好的记者会开场白稿件原文如下：

下午好。我和我的同事们仍然专注于实现我们的双重使命目标，即充分就业和稳定物价，以造福美国人民。经济总体强劲，过去两年在实现我们的目标方面取得了重大进展。劳动力市场已从之前的过热状态降温并保持稳健。截至9月份，通货膨胀率已从7%的峰值大幅下降至2.1%。我们致力于通过支持充分就业和将通货膨胀率恢复到2%的目标来保持经济的强劲。

Good afternoon. My colleagues and I remain squarely focused on achieving our dual mandate goals of maximum employment and stable prices for the benefit of the American people. The economy is strong overall and has made significant progress toward our goals over the past two years. The labor market has cooled from its formerly overheated state and remains solid. Inflation has eased substantially from a peak of 7 percent to 2.1 percent as of September. We are committed to maintaining our economy’s strength by supporting maximum employment and returning inflation to our 2 percent goal.

今天，联邦公开市场委员会决定采取进一步措施，降低政策约束程度，将政策利率下调25个基点。我们仍然相信，只要适当调整我们的政策立场，经济和劳动力市场的强劲势头就能保持下去，通胀率将持续下降至2%。我们还决定继续减少证券持有量。在简要回顾经济发展情况后，我将就货币政策发表更多看法。

Today, the FOMC decided to take another step in reducing the degree of policy restraint by lowering our policy interest rate by 1/4 percentage point. We continue to be confident that with an appropriate recalibration of our policy stance, strength in the economy and the labor market can be maintained, with inflation moving sustainably down to 2 percent. We also decided to continue to reduce our securities holdings. I will have more to say about monetary policy after briefly reviewing economic developments.

最近的指标显示，经济活动继续稳步增长。第三季度国内生产总值年增长率为2.8%，与第二季度大致相同。消费支出增长保持韧性，设备和无形资产投资增强。相比之下，房地产行业的活动一直疲软。总体而言，供应条件的改善支撑了美国经济在过去一年的强劲表现。

Recent indicators suggest that economic activity has continued to expand at a solid pace. GDP rose at an annual rate of 2.8 percent in the third quarter, about the same pace as in the second quarter. Growth of consumer spending has remained resilient, and investment in equipment and intangibles has strengthened. In contrast, activity in the housing sector has been weak. Overall, improving supply conditions have supported the strong performance of the U.S. economy over the past year.

The labor market conditions remain robust. The growth rate of employment positions has slowed from earlier this year, with an average of 0.104 million new positions added per month over the past three months. This number would likely have been higher if not for the impact of the strikes and hurricanes in October on employment. Concerning the hurricanes, please allow me to express condolences to all the families, businesses, and communities affected by these destructive storms. The unemployment rate is significantly higher than a year ago, but has decreased over the past three months, remaining low at 4.1% in October. Nominal wage growth has slowed over the past year, and the gap between job openings and job seekers has narrowed. Overall, a range of indicators indicates that the labor market tension has eased compared to pre-pandemic levels in 2019. The labor market is not a major source of inflationary pressure.

In the labor market, conditions remain solid. Payroll job gains have slowed from earlier in the year, averaging 104 thousand per month over the past three months. This figure would have been somewhat higher were it not for the effects of labor strikes and hurricanes on employment in October. Regarding the hurricanes, let me extend our sympathies to all the families, businesses, and communities who have been harmed by these devastating storms. The unemployment rate is notably higher than it was a year ago, but has edged down over the past three months and remains low at 4.1 percent in October. Nominal wage growth has eased over the past year, and the jobs-to-workers gap has narrowed. Overall, a broad set of indicators suggests that conditions in the labor market are now less tight than just before the pandemic in 2019. The labor market is not a source of significant inflationary pressures.

Over the past two years, the inflation rate has decreased significantly. Over the 12 months ending in September, total PCE prices rose by 2.1%; excluding the volatile food and energy categories, core PCE prices rose by 2.7%. Overall, the inflation rate is now closer to our long-term target of 2%, but core inflation remains slightly elevated. Long-term inflation expectations still seem stable, based on extensive surveys of households, businesses, forecasters, and financial market indicators.

Inflation has eased significantly over the past two years. Total PCE prices rose 2.1 percent over the 12 months ending in September; excluding the volatile food and energy categories, core PCE prices rose 2.7 percent. Overall, inflation has moved much closer to our 2 percent longer-run goal, but core inflation remains somewhat elevated. Longer-term inflation expectations appear to remain well anchored, as reflected in a broad range of surveys of households, businesses, and forecasters, as well as measures from financial markets.

Our monetary policy actions are aimed at promoting full employment and price stability for the American people. We believe the risks to achieving our employment and inflation goals are roughly balanced, and we are attentive to the risks each of our mandates faces.

Our monetary policy actions are guided by our dual mandate to promote maximum employment and stable prices for the American people. We see the risks to achieving our employment and inflation goals as being roughly in balance, and we are attentive to the risks to both sides of our mandate.

At today's meeting, the committee decided to lower the target range for the federal funds rate by 25 basis points to a range of 4.5% to 4.75%. Further adjusting our policy stance will help maintain the strength of the economy and labor market, and continue to push inflation further down, gradually transitioning towards a more neutral stance.

At today’s meeting the Committee decided to lower the target range for the federal funds rate by 1/4 percentage point, to 4-1/2 to 4-3/4 percent. This further recalibration of our policy stance will help maintain the strength of the economy and the labor market and will continue to enable further progress on inflation as we move toward a more neutral stance over time.

We know that reducing policy restraint too quickly could hinder progress on inflation. At the same time, reducing policy restraint too slowly could unduly weaken economic activity and employment. When considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess forthcoming data, evolving outlook, and risk balance. There is no preset path, decisions will continue to be made meeting by meeting.

We know that reducing policy restraint too quickly could hinder progress on inflation. At the same time, reducing policy restraint too slowly could unduly weaken economic activity and employment. In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. We are not on any preset course. We will continue to make our decisions meeting by meeting.

As the economy evolves, monetary policy will be adjusted to best promote our achievement of full employment and price stability objectives. If the economy remains strong but inflation is not progressing towards 2%, policy restrictions can be reduced more slowly. In the event of unexpected weakening in the labor market or faster-than-expected decrease in inflation, more rapid actions can be taken. Policy is prepared to address the risks and uncertainties encountered in pursuing our dual mandate.

As the economy evolves, monetary policy will adjust in order to best promote our maximum employment and price stability goals. If the economy remains strong and inflation is not sustainably moving toward 2 percent, we can dial back policy restraint more slowly. If the labor market were to weaken unexpectedly or inflation were to fall more quickly than anticipated, we can move more quickly. Policy is well positioned to deal with the risks and uncertainties that we face in pursuing both sides of our dual mandate.

The Federal Reserve has been given two monetary policy objectives—maximum employment and stable prices. We remain dedicated to supporting maximum employment, lowering the inflation rate to 2%, and maintaining stable long-term inflation expectations. Achieving these goals is crucial for all Americans. We understand that our actions impact communities, families, and businesses nationwide. Everything we do is in service of fulfilling our public mission. The Fed will make every effort to achieve the goals of maximum employment and price stability. Thank you and looking forward to the discussion.

The Fed has been assigned two goals for monetary policy—maximum employment and stable prices. We remain committed to supporting maximum employment, bringing inflation sustainably to our 2 percent goal, and keeping longer-term inflation expectations well anchored. Our success in delivering on these goals matters to all Americans. We understand that our actions affect communities, families, and businesses across the country. Everything we do is in service to our public mission. We at the Fed will do everything we can to achieve our maximum employment and price stability goals. Thank you. I look forward to our discussion.

Editor/Lambor