Powell's Press Conference Filled with Golden Quotes

Low inflation is a serious issue; the Federal Reserve hopes to consistently maintain inflation around the 2% level;

Trump criticized you. Do you think the new government will affect the Fed's decision-making independence?

Powell: "I don’t care about him!" If Trump asks you to resign, would you leave? NO!

Why haven't Americans felt the strength of the economy? Because we just experienced global inflation, and things will improve over time;

Are you worried about the rise in long-term inflation expectations?

The data we see now is okay, but the Fed does not want to see long-term inflation expectations rise. If people expect inflation in the future, then inflation will indeed happen.

What are the potential risks under the current path?

Policy execution is too fast, leading to repeated inflation; policy execution is too slow, resulting in a weak job market;

Regarding the unemployment rate, although the data shows some pressure on employment, the current goal is to maintain the unemployment rate at this level. Other employment data indicates that the job market remains healthy;

On the election issue, Powell refused to answer;

What circumstances would lead to a pause in interest rate cuts?

It still depends on the job market situation. If the labor market continues to heat up, then consideration will be given to whether to slow down the policy pace; the ongoing QT is equivalent to slowing down interest rate cuts, similar to deceleration before a plane lands.

Why is the market rising sharply while continuing to cut interest rates?

He expressed pleasure in seeing this situation. Regarding the current data, he does not want employment to continue to cool down, just maintaining at this level is sufficient;

Regarding the new government's budget deficit issue?

He stated that there has been no modeling done for this yet-to-be-implemented fiscal policy;

Why was the reason for deleting "more confident in seeing inflation decline"?

He indicated that this does not imply concerns about inflation stickiness. The Fed's decisions are still based on data;

"The committee will continue to reduce its holdings of Treasury securities, agency debt, and agency mortgage-backed securities." This indicates that QT (quantitative tightening) will continue, with no clues given about when to pause or start QE.

The policy statement did not express views on the election, but the phrase "more confident that inflation is continuously moving toward the target" was removed. Although not explicitly stated, it certainly also considered the impact of fiscal policy on inflation and employment after Trump takes office.