On Wednesday, September 18th, qualcomm Chairman Powell's press conference released a hawkish signal. The US stocks continued to rise at his speech, then turned down after noticing something wrong, returning to the low point before noon, and the bond market, gold, and currency market also made a 180-degree reversal.

This is mainly because Powell stated that the Federal Reserve is just "moderately adjusting its policy stance," without a predetermined policy path. It will continue to make decisions based on economic data at each meeting, and the pace of future rate cuts can be fast, slow, or even paused.

For example, he mentioned several policy combinations: if the economy remains healthy and inflation persists, the Federal Reserve will slow down rate cuts; however, if the labor market unexpectedly weakens, or if inflation falls faster than expected, they are prepared to aggressively cut rates in response.

Overall, Powell intends to dispel market speculation of "a large 50-basis-point rate cut becoming the new norm."

The following is the full text of his remarks before answering media questions (Chinese-English translation):

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.

Good afternoon, my colleagues and I remain focused on achieving the Federal Reserve's dual goals of maximizing employment and price stability to benefit the American people.

Our 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. Inflation has eased substantially from a peak of 7% to an estimated 2.2% as of August, we're committed to maintaining our economy's strength by supporting maximum employment and returning inflation to our 2% goal.

The US 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. As of August, inflation has eased substantially from a peak of 7% to an estimated 2.2%. The Federal Reserve is committed to maintaining the economy's strength by supporting maximum employment and returning inflation to the 2% goal.

Today, the Federal Open Market Committee decided to reduce the degree of policy restraint by lowering our policy interest rate by a half percentage point. This decision reflects our growing confidence that with an appropriate recalibration of our policy stance, strength in the labor market can be maintained in a context of moderate growth and inflation moving sustainably down to 2%. We also decided to continue to reduce our securities holdings. I will have more to say about monetary policy after briefly reviewing economic developments.

Today, the Federal Open Market Committee decided to lower the policy interest rate by 50 basis points. This decision reflects our increasing confidence that, with appropriate adjustments to our policy stance, the strong momentum in the labor market can be maintained against the backdrop of moderate economic growth and inflation sustainably declining to 2%. We also decided to continue reducing the balance sheet. After a brief review of economic developments, I will have more to say about monetary policy.

Recent indicators suggest that economic activity has continued to expand at a solid pace. GDP rose at an annual rate of 2.2% in the first half of the year, and available data point to a similar pace of growth this quarter. Consumer spending growth has remained resilient, and investment in equipment and intangibles has picked up from last year's weak pace. In the housing sector, investment declined in the second quarter after a strong increase in the first. Improved supply conditions have supported strong demand and the robust performance of the US economy over the past year. Based on our economic projections, Committee participants generally expect solid GDP growth, with a median projection of 2% over the next few years.

Recent indicators suggest that the US economy continues to grow steadily. In the first half of this year, GDP grew at an annual rate of 2.2%, and available data suggests a similar growth rate for the third quarter. Consumer spending growth remains resilient, and investment in equipment and intangible assets has rebounded from last year's sluggish pace. In the housing sector, investment declined in the second quarter after a strong growth in the first quarter. Improved supply conditions have supported the strong demand for the US economy in the past year. According to our economic projections, participants in the FOMC generally expect solid GDP growth, with a median projection of 2% in the coming years.

In the labor market, conditions have continued to cool. Payroll job gains averaged 116,000 per month over the past three months, a notable step down from the pace seen earlier in the year. The unemployment rate has moved up, but remains low at 4.2%. Nominal wage growth has eased over the past year, and the jobs to workers gap has narrowed overall. A broad set of indicators suggest 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 elevated inflationary pressures. The median projection for the unemployment rate in the SEP is 4.4% at the end of this year, four tenths higher than projected in June.

Labor market conditions continue to cool. Over the past three months, payroll employment increased by an average of 0.116 million per month, a significant slowdown compared to earlier this year. The unemployment rate has increased slightly but remains low at 4.2%. 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 suggest that the tightness of the labor market has eased compared to before the outbreak of the pandemic in 2019. The labor market is no longer the main source of high inflationary pressures. The median projection for the unemployment rate in the SEP is 4.4% at the end of this year, 0.4 percentage points higher than the June projection.

Inflation has notably eased over the past two years but remains above our long-term goal of 2%. Estimates based on the consumer price index and other data indicate that total PCE prices rose 2.2% over the 12 months ending in August, with core PCE prices (excluding volatile food and energy categories) rising 2.7%. Longer-term inflation expectations appear to remain well anchored, as reflected in surveys of households, businesses, forecasters, and financial market measures. The median projection in the SEP for total PCE inflation is 2.3% this year and 2.1% next year, slightly lower than projected in June. Thereafter, the median projection is 2%.

Inflation has significantly decreased over the past two years but remains higher than our long-term goal of 2%. Based on the consumer price index and other data, nominal PCE prices are estimated to have increased by 2.2% over the 12 months ending in August, with core PCE prices, which exclude volatile food and energy categories, rising by 2.7%. Long-term inflation expectations seem to remain well anchored, as reflected in surveys of households, businesses, forecasters, and financial markets. The median projection in the SEP for PCE total inflation this year is 2.3%, and 2.1% next year, slightly lower than the June forecast. The median projection for 2026 and beyond is 2%.

Our monetary policy actions are guided by our dual mandate to promote maximum employment and stable prices for the American people. For much of the past three years, inflation ran well above our 2% goal, and labor market conditions were extremely tight. Our primary focus had been on bringing down inflation, and appropriately so, we are acutely aware that high inflation imposes significant hardship as it erodes purchasing power, especially for those least able to meet the higher costs of essentials like food, housing, and transportation. Our restrictive monetary policy has helped restore the balance between aggregate supply and demand, easing inflationary pressures, and ensuring that inflation expectations remain well anchored.

Our mmf policy actions are guided by the dual mandate of promoting full employment and price stability for the American people. For most of the past three years, the inflation rate has been well above our 2% target, and the labor market conditions have been extremely tight. At that time, our primary focus was on reducing the inflation rate, which was the right thing to do. We were keenly aware that high inflation would cause significant difficulties because it erodes purchasing power, especially for those who are least able to afford the high costs of necessities such as food, housing, and transportation. Our restrictive mmf policy has helped restore the balance between total supply and total demand, alleviate inflationary pressures, and ensure good anchoring of inflation expectations.

Our patient strategy over the past year has paid off. Inflation is now closer to our target, and we are more confident that inflation is steadily moving toward 2%. As inflation has decreased, the labor market has cooled, the upward risks to inflation have decreased, and the downward risks to employment have increased. We now believe that the risks of achieving our employment and inflation goals are roughly balanced, and we are mindful of the risks to both aspects of our dual mandate in view of the progress on inflation and the balance of risks.

Over the past year, our patient strategy has paid off. Inflation is now closer to our target, and we are more confident that inflation is steadily moving toward 2%. As inflation has decreased, the labor market has cooled, the upward risks of inflation have decreased, and the downward risks of employment have increased. We now believe that the risks of achieving employment and inflation goals are roughly balanced. In light of the progress on inflation and the balance of risks, we are attentive to the risks faced by the various objectives of our dual mandate.

At today's meeting, the committee decided to lower the target range for the federal funds rate by half a percentage point to 4.75% to 5%. This recalibration of our policy stance will help maintain the strength of the economy and the labor market, and will continue to facilitate further decline in inflation as we move towards a more neutral stance.

At today's meeting, the committee decided to lower the target range for the federal funds rate by 50 basis points, to 4.75% to 5%. This recalibration of the policy stance will help maintain the strength of the economy and the labor market, and will continue to drive further declines in inflation, as we are beginning to shift to a more neutral stance.

We do not have a preset policy course, and will continue to make decisions at each meeting. We understand that reducing policy restraints too quickly could hinder the cooling of inflation. Similarly, reducing restraints too slowly could excessively weaken economic activity and employment. When 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 do not have a preset policy course and will continue to make decisions meeting by meeting. We understand that reducing policy restraints too quickly could hinder progress on cooling inflation. Similarly, reducing restraints too slowly could excessively weaken economic activity and employment. When considering additional adjustments to the target range for the federal funds rate, the Committee will carefully evaluate incoming data, the evolving outlook, and the balance of risks.

In our September FOMC meeting, participants provided their individual assessments of an appropriate path for the federal funds rate based on their judgments of the most likely future scenario, assuming the expected evolution of the economy. The median participant projects that the appropriate level of the federal funds rate will be 4.4% at the end of this year and 3.4% at the end of 2025. These median projections are lower than those in June, reflecting the projections of lower inflation, higher unemployment, and a shifted balance of risks.

At our September FOMC meeting, participants evaluated the appropriate path for the federal funds rate based on their individual judgments about the most likely future scenarios. The median projection indicates that the appropriate level of the federal funds rate will be 4.4% at the end of this year and 3.4% at the end of 2025. These median projections are lower than the ones made in June, which is consistent with the projections for lower inflation, higher unemployment, and a shift in risk balance.

However, these projections do not represent a plan or decision made by the committee. As the economy evolves, monetary policy will be adjusted in order to best promote maximum employment and price stability goals. If the economy remains strong and inflation persists, policy restraint can be eased more gradually. If there is an unexpected weakening in the labor market or inflation falls more quickly than anticipated, we are prepared to respond accordingly.

Nevertheless, these projections do not reflect the committee's plan or decision. As the economy evolves, monetary policy will be adjusted in order to best promote our goals of maximizing employment and maintaining price stability. If the economy remains robust and inflation persists, we can relax policy constraints more slowly. If the labor market unexpectedly weakens or inflation falls faster than expected, we are also prepared to respond.

Policy is well positioned to address the risks and uncertainties we face in pursuing both aspects of our dual mandate. The Fed has been given two goals for monetary policy: maximum employment and stable prices. We remain committed to supporting maximum employment, bringing inflation back to our 2% target, and keeping longer-term inflation expectations well anchored. Our success in achieving these goals is important to all Americans. We understand that our actions have an impact on communities, families, and businesses across the country. Everything we do is in service of our public mission. At the Fed, we will do everything we can to achieve our maximum employment and price stability objectives.

Policy is prepared to address the risks and uncertainties we face in fulfilling our dual mandate. The Federal Reserve has been assigned two monetary policy objectives: maximum employment and stable prices. We remain committed to supporting full employment, achieving the inflation rate target of 2%, and maintaining well-anchored long-term inflation expectations. Our ability to achieve these objectives is of utmost importance to all Americans. We understand that our actions impact communities, families, and businesses nationwide. We strive to fulfill our public mission by doing everything in our power at the Federal Reserve to achieve maximum employment and price stability.

Editor/Rocky