The Fed is in no hurry to cut rates.

In a recent interview, Jerome Powell, the chair of the Federal Reserve, laid out the current direction of the United States' monetary policyHis remarks have once again captured the market's attention, particularly in light of the fluctuations in the stock market and the frequent shifts in U.S. policy, making Powell's statements particularly significant.

He made it clear that the Federal Reserve is in no rush to implement interest rate cutsPowell emphasized that the current economic conditions in the U.S. do not necessitate an immediate and major shift in policyInflation remains at the forefront of the Federal Reserve's concerns, with the target set at a stable 2%. Furthermore, he noted that the Federal Reserve will continue to closely monitor the labor market, particularly aspects such as unemployment rates and wage growth, which are essential indicators for adjusting monetary policy.

Amidst this discussion, Powell also revealed that this year the Fed will conduct its five-year policy framework review, during which it will reassess the effectiveness of its monetary policies and their impacts on the economyThis review will take into account the changes in inflation and employment trendsThus, while Powell did not explicitly predict whether interest rates would be lowered in the future, it is anticipated that any adjustments to the Federal Reserve's policies will be based on a thorough analysis of economic data rather than transient market trends.

Powell reiterated the crucial principle of the Federal Reserve's independence in executing its monetary policyHe reaffirmed that the Fed’s role is to make decisions grounded in economic data rather than to cater to any political pressures

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This is an important distinction, indicating that Powell aims to maintain the integrity of the institution against potential external influences.

Once again, he asserted that his focus will remain on fostering stable economic growth and achieving low inflation targets, steering clear of entanglement in political disputes.

As for the ongoing policy developments in the U.S., particularly in areas such as tariffs, immigration, and fiscal stimulus measures, Powell noted that the Federal Reserve is currently unable to comprehensively assess the long-term impacts of these policies on the economyHe expressed that various U.S. policy measures could influence the economy at multiple levels, but these effects will require additional time to materializeConsequently, the Fed will continue to monitor how these policies affect inflation, employment, and other economic indicators.

Despite the fact that U.S. policies occasionally grab the market's spotlight, Powell remains composed, underscoring that the responsibility of the Federal Reserve is to operate independently of political fluctuationsTherefore, the adjustments to monetary policy will be based on economic data and changing market conditions rather than being swayed by external policy shifts.

Recently, the stock market saw significant fluctuations, particularly concerning AI computing stocks, prompting concerns among some investorsHowever, Powell did not exhibit an excessive level of anxiety regarding these changesHe downplayed the broader macroeconomic impact of this stock market downturn, suggesting that the volatility is more closely related to changes in financial conditions rather than a mere reaction to market sentiment.

Powell indicated that the volatility in financial markets often reflects investor expectations about economic trends, but from the Federal Reserve's perspective, the primary concern is whether there have been substantial changes in financial conditions, such as credit tightness and rising costs of corporate financing