President of the Federal Reserve (Fed) Powell delivered an important speech at the Jackson Hall Annual Conference on the 25th.After the content of the content is drawn, the passage shows Powell's determination to fight against inflation. There is no word that shows the clues that the tightening cycle has ended.But on the other hand, Powell did not make it clear that it was necessary to raise interest rates in the short term, and would still maintain the decision -making position of step -by -step camps. Only when necessary would they prepare further tightening.On the whole, the content of the speech is smooth and stable. On the one hand, it adheres to inflation, and at the same time, it also retains elasticity for the following interest rates; the internal eagle and pigeons have achieved subtle balance, and the markets and empty parties can also take their own needs.

The tone of

Powell's speech is still in the fight against inflation and long roads to go.First of all, although the recent inflation has declined significantly, he believes that it is still too high.Although the market is excited because the overall consumer price index (CPI) has dropped to 3%, Powell emphasized that food and energy prices are still turbulent, and the overall CPI may be misleading by inflation direction. Therefore, he still emphasizes personal consumption expenditure (PCE) core flattening index is still sticky.Although the inflation declined in June and July, it can only be regarded as a good start.

Secondly, Powell reiterated that "2%is still our inflation goal."At present, many economists advocate that FED should increase the inflation target to 3%, so that the FED can cut interest rates earlier.The inflation goal is not unchanged, but the premise is that the public must be persuaded first; if the inflation rate cannot be less than 3%within at least half a year, the FED should not end the tightening position, otherwise it will only make the public expect that the FED in the future will not be able to meet the standards in the future., Will further improve the goal. As a result, it will seriously harm the reputation of the FED, disrupt the inflation expectations, increase the inflation premium of interest rates, increase the interest burden of the public, increase the government's fiscal deficit, and weaken private investment.Therefore, the Fed must now insist on lowering inflation, and then consider improving when formulating a new decision -making structure in 2025, so that it can have a more solid foundation.

Furthermore, Powell also emphasized that it is necessary to continue to fall in the target of 2%, and the economic growth requires economic growth to be lower than the level of trend growth during a period of time, and the labor market situation weakens.In the economy, the annual economic growth rate of the first quarter of this year is 2%, and the second quarter is also above 2%. The GDPNOW indicator prepared by the Federal Preparation Bank of Atlanta region predicts that the third quarter will exceed 5%, which is much higher than the long -term trend.level.If the economic growth continues to be higher than the level of trend, it may increase inflation again, and it will also need to further tighten the monetary policy.

In terms of

In terms of labor market, the substantial wages increased after the decline in inflation; although the job shortage decreased significantly, the unemployment did not increase, indicating that the labor demand was very large.Therefore, once evidence shows that the labor market is no longer loose, FED may also need to respond to monetary policy.Powell also highlights the two missions of "stability of prices" and "maximum employment". Stability of prices is a necessary condition. Only by restoring the price of prices can the labor market continue to be strong.Although both are the mission of the FED, there are still priority points in the order of priority.In order to lower the inflation, even if the unemployment mild increase is increased.

In addition, Williams, Vice Chairman of the Federal Public Marketing Committee (FOMC) of the "Pigeon School" coach, advocates long-term substantial neutral interest rates (R*) will return to the low level before the epidemic, about -0.5%, that is, next year, that is, next year,FED will cut interest rates significantly.However, the "Eagle School" has advocated a variety of structural factors such as aging population, de-globalization, green energy transformation, geopolitical conflict, and the surge in liabilities in the US government, which has pushed R*to 1.5%-2%.At the time of interest rates, the economy can still be strong, so the era of low interest rates has not returned.Powell said that since the Fed cannot clearly define the position of R*, it is impossible to determine where the binding interest rate level is.Powell did not embrace Williams' views, and also showed that he is currently only focused on suppressing inflation.

But Powell is not "one eagle to the end."He mentioned in his speech that two forces that are conducive to decline in inflation are "in the pipeline".The first is that the rent is declining, and the residential service inflation will be suppressed in the next year; the second is that the "Time LAG effect" of a tightening policy has not fully played. In the futureleg.This shows that Powell claims that FED should be more patient before further interest rate increases.

From Powell's speech, it can be determined that the FED will be motionless in September, and it may still be the case in November. December is the key time to decide whether to further raise interest rates.As for the next year, do you start to cut interest rates?The opportunity is still slim.