Federal Reserve Chairman Powell delivered his semi-annual monetary policy testimony to the Senate Banking Committee. His main points are as follows:

Inflation has slowed noticeably but remains above the 2% target, and recent inflation data show “modest” progress towards the 2% target.

Until the Fed is more confident that inflation is heading toward 2%, it is not appropriate to cut interest rates; easing policy too early and too much may harm inflation progress. The Fed will continue to make decisions on a case-by-case basis.

We are firmly committed to our 2% inflation target and keep long-term inflation expectations stable. The labor market is strong but not overheated.

The risks to achieving employment and inflation goals are "becoming better balanced." The U.S. economy is growing at a "solid pace."

Restrictive policies help put downward pressure on inflation, but reducing restrictions too early or too much risks reversing the inflation process, while reducing restrictions too late or too lightly could unduly weaken the economy and the job market.

The first quarter data "does not support" greater confidence in the inflation path, which is exactly what the Fed needs to cut interest rates. GDP growth in the first half of 2024 appears to have slowed.

The Federal Reserve's operational independence requires maintaining a long-term perspective in pursuing its objectives.

In terms of market reaction, U.S. Treasury yields fluctuated but rose on the day; the S&P 500 maintained its upward trend.

Traders are pricing in a slightly more than 70% chance of the Fed’s first rate cut in September, with two 25 basis point cuts expected in 2024.

Powell's speech showed that the Fed's attitude towards inflation remains cautious, emphasizing that policy decisions will depend on the performance of economic data.

The market's expectations for the Fed's interest rate cuts have also been adjusted to a certain extent. However, the specific policy direction still needs to pay attention to subsequent economic data and more statements from Fed officials. #美联储何时降息？ #BTC