At 20:40 tonight, Powell will deliver the opening speech at an event. Some analysts believe that the core of this speech will be the Federal Reserve's assessment of its MMF policy framework, which is expected to undergo some adjustments, focusing on a "symmetrical" approach to inflation response and improving the Federal Reserve's economic outlook summary.
At 20:40 Peking time tonight (May 15), Federal Reserve Chairman Powell will deliver the opening remarks at the second Thomas Laubach Research Conference.
Although the market generally expects hints of interest rate cuts, it is likely that Powell will shift the focus to more substantive topics.
Some analysts believe that the core of this speech will be the Federal Reserve's assessment of its MMF policy framework, which outlines how to fulfill the dual mandate of maximum employment and price stability.
While some economists are calling for significant reforms, some analysts believe that this year's framework update will be more subtle. Some adjustments are expected, focusing on implementing a "symmetrical" approach to inflation responses and improving the Federal Reserve's Summary of Economic Projections (SEP), which many critics argue is not transparent enough.
Compared to the major overhaul of the framework in 2020, this adjustment will be more nuanced.
The last time the Federal Reserve completely reformed its MMF policy framework was in 2020. At that time, interest rates were close to zero, and the Federal Reserve was injecting liquidity into the financial system.
However, since then, the situation has changed dramatically. Inflation surged to a peak of 9.1% in 2022, prompting the Federal Reserve to take the most aggressive rate hikes in 40 years.
Although current price pressures have eased somewhat, they still exceed the Federal Reserve's 2% target.
This speech coincides with renewed political pressure. On Wednesday, Trump continued to "attack" Powell, writing:
"The Federal Reserve must lower interest rates like Europe. What is wrong with a delayed Powell? Isn't it unfair for a thriving USA? Just let everything happen, that would be a beautiful thing!"
Furthermore, Trump's tariff threats loom over all of the Federal Reserve’s work, and trade policies may make the Fed's job even tougher.
While Thursday's market may not receive a clear timeline for interest rate cuts, Powell's speech may provide a window into the Federal Reserve's thoughts for the next decade. Investors should pay attention to the Fed's views on inflation, as well as how it will address political pressure and potential trade wars.
Get a sneak peek at important financial events and discover investment opportunities early! Open Futubull > Market > US Stocks >Financial Calendar/Selected macro data., seizing investment opportunities!
Editor/Rocky
