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鲍威尔发布会要点出炉!声明通胀表述并非发出信号,没跟特朗普联系过

Key points from Powell's press conference are out! The statement on inflation does not send a signal, and there has been no contact with Trump.

wallstreetcn ·  Jan 29 19:55

This contradicts Trump's call for "immediate interest rate cuts" at the Davos Forum. He explained why there would be no interest rate cuts for now and predicted that inflation would continue to cool down. Some analysts believe that the press conference was more dovish than the policy statement, as there were concerns prior about the end of the current rate-cutting cycle; however, many are still not ruling out the possibility of a cut in March. Powell stated that the recent AI sell-off in the financial markets is unsustainable and will not persist stubbornly, but at this stage, many Indicators show that Assets prices are relatively high. He reiterated that there will be no change to the inflation target in the short term and stated that the current Federal Reserve policy rate is significantly above the neutral rate.

On Wednesday, January 29, Federal Reserve Chairman Powell explicitly stated at a press conference that the FOMC does not need to rush to adjust its MMF policy stance, as inflation remains somewhat elevated, which contrasts with Trump's call for an "immediate interest rate cut" at the Davos Forum.

In his first press conference after Trump took office, Powell said the US economy is overall strong, the labor market has cooled but remains robust, and a broad range of indicators show that the job market is balanced, with economic activity continuing to expand at a solid pace.

Powell's explanation for why the interest rate cut was paused.

During the Q&A session, Powell reiterated multiple times that the Federal Reserve is not in a hurry to adjust its MMF policy, believing that the current situation is "very good for policy and the economy," with long-term inflation expectations appearing to be well anchored and the risks faced by the dual mandate of inflation and employment roughly balanced.

"Given that our policy stance is already much more accommodating than before, and the US economy and job market remain strong, we do not need to rush to adjust our policy stance."

Powell also stated that "the Federal Reserve still expects inflation to improve further," with market commentary agency Vital Knowledge Editor Adam Crisafulli believing that the press conference seemed more dovish than the Federal Reserve's policy statement.

"Powell essentially said that the adjustment of the statement (i.e., removing the wording about inflation progress) should not be interpreted as a hawkish shift. During the press conference, Powell acknowledged that inflation has significantly improved over the past two years, closer to the 2% target, while inflation expectations remain anchored."

Powell's comments on when to restart rate cuts again.

Powell clearly stated that the Federal Reserve needs to see progress in the annual (PCE) inflation data.

"The Fed will not act before seeing more evidence. Inflation must genuinely make progress, or the labor market must show some weakness before we consider making adjustments."

However, when asked if the Fed needs to wait until inflation rates drop completely to 2% before cutting rates again, Powell stated that it is not necessary and said, "The Fed just needs to see further progress, and it is not necessary to wait until it falls back to 2% before cutting rates again."

Powell also stated that the Fed's monetary policy is not on a preset path and is ready in both directions to address risks and uncertainties, whether to maintain a more restrictive monetary policy or to ease it.

"We know that reducing policy constraints too quickly or too much may hinder progress in cooling inflation. At the same time, reducing constraints too slowly or too little may excessively weaken economic activity and employment.

The Fed will evaluate upcoming data, the ever-changing outlook, and risks to adjust its policy stance.

If the economy remains strong while inflation does not continue to consistently approach 2%, we can maintain policy constraints for a longer period. If the labor market unexpectedly weakens, or if inflation declines faster than expected, we can relax policies accordingly.

So will there be a restart of interest rate cuts in March? Powell neither said 'no' nor 'yes'.

When specifically asked whether there will be an interest rate cut in March, Powell stated that deflation (i.e., a reduction in inflation) is still on a 'slow and sometimes bumpy road,' and there is a general consensus that the Federal Reserve does not need to rush to further loosen policies.

Some analysts believe that Powell repeatedly emphasized 'no rush to adjust policies,' which may indicate that unless future data significantly weakens, there will be a pause in interest rate cuts in January and March this year.

However, because Powell also highlighted that the economic impact of Trump's policies is highly uncertain, Krishna Guha, head of Global Policy and Central Bank Strategy at investment bank Evercore ISI, believes that the likelihood of an interest rate cut in March has diminished.

Although we still do not rule out the possibility of a rate cut in March, this policy statement and Powell's emphasis on the need to watch the impact of Trump's policies indeed indicate that a broader group of Federal Reserve officials tend to view June as the next decision point.

Marvin Loh, a senior global macro strategist at State Street, believes that Powell seems to maintain his view that USA monetary policy remains sufficiently restrictive, which neither excessively raises inflation or continues to drive the economy toward its goals:

'Whether this is a long-term pause in interest rate cuts or a declaration of the complete end of this interest rate cut cycle will depend on future economic data, but the threshold for the Federal Reserve to completely shift to an interest rate hike is still quite high.'

Powell commented on the White House: After being called for interest rate cuts at the Davos Forum, he has not contacted Trump.

Powell has always been quite cautious regarding Topics surrounding the White House, Trump, and politics. During this press conference, he repeatedly addressed those attempting to 'break him' by saying, 'I will not respond to or comment on the President's remarks as it would be inappropriate for me to do so.'

Powell acknowledged that he has not spoken with the President since Trump's remote speech at the Davos forum last week, where he called for the Federal Reserve to lower interest rates immediately. Moreover, the Federal Reserve is currently assessing Trump's executive orders.

When asked whether Trump’s frequent threats of tariffs would cause Powell to reconsider his economic growth forecasts, Powell again avoided the question, stating, 'We do not know what will happen with tariffs, immigration, fiscal policy, or regulatory policy,' and added, 'I hope to avoid making even indirect comments on tariff actions.'

However, he emphasized that Trump’s decisions surrounding these core issues currently create significant uncertainty:

'The potential impact of tariffs could be extremely broad.'

'We do not know how long the tariffs will last, how large they will be, or which countries will be affected. We do not know what kind of retaliation will arise. We do not know how tariffs will transmit through the economy to consumers. This indeed remains to be seen.'

'We need to first clarify what these policies are before we can start to properly assess their impact on the economy.'

Powell admitted that the Federal Reserve can only continue to do what it does best, using the same (methodology) to respond to the changing (situation):

The public should believe that we will continue to work as usual, focusing on using our tools to achieve our dual mission, and truly working hard.

The best thing we can do is what we have already done, which is to research and pay attention to this issue, review historical experience, read literature, think about potentially important factors, and then wait and see.

Uncertainty always accompanies us. Clearly, the failure to fully recognize or consider the possibility of extreme events occurring is human nature. There are too many variables, and we can only wait and see.

Powell also stated that there is every reason to expect a continued decline in the scale of cross-border immigration inflow, and he would not discuss Trump's plan to lower energy costs through expanded energy production to curb inflation. The uncertainty surrounding trade policies during Trump's previous presidential term seems to have ultimately affected corporate investment decisions.

Some analyses suggest that Powell can still buy some time for himself by suggesting that it is too early to evaluate new policies, but as Trump's policies gradually unfold and clarify, there is not much time left for Powell to maintain a "ambiguous" attitude.

What else did Powell say?

Market Commentary:

Powell stated that the recent AI sell-off in financial markets is unsustainable and cannot persist stubbornly. At this stage, from many indicators, asset prices are relatively high, largely due to the influence of Technology and AI. Overall financial conditions may be accommodative, but there are both good and bad aspects.

AI is a significant matter in the stock market. However, what the Federal Reserve truly cares about is macro development, which means that major changes in financial conditions will continue for some time. Powell downplayed the macro impact that DeepSeek caused on the stock market's sharp decline this week in Europe and the USA but stated that the Federal Reserve is paying attention to this topic.

Speaking of Bitcoin:

Powell was asked about the risks of Cryptos and whether he is concerned that speculation in this asset class may harm people. He said that the Federal Reserve's role regarding Cryptos is to pay attention to Banks, which can currently serve cryptocurrency customers.

He also noted that the Federal Reserve "does not oppose innovation" and they "certainly" do not want to take actions that would lead Banks to terminate services to "perfectly legal" customers simply because of regulatory overhang.

Insisting that the inflation target will not change in the short term:

Powell reiterated, "We will not change 2% as the central bank's inflation target anytime soon."

Specifically, in the latest review of the monetary policy framework, the 2% long-term target will be retained and will not be the focus of the review. His reasoning is that if the current 2% target cannot actually be achieved, then changing it is pointless.

However, some analysts have pointed out that Powell's reason for not changing the 2% target is "currently unachievable," seemingly planting the seeds for a willingness to reconsider this issue in the long run.

Powell stated that the Federal Reserve has started discussing the evaluation of the policy framework, intending to complete the evaluation process by late summer 2025.

Comments on the neutral interest rate:

Powell reiterated that "you cannot know exactly" where the neutral interest rate lies, but he believes that the current Federal Reserve policy rate is significantly above the neutral rate. This seems to suggest that the Fed is bound to continue cutting rates, and this rate-cutting cycle has not yet ended.

Edit / lambor, ping

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