Fed Chairman Powell said that inflation may return to 2% by the end of next year or the year after. The Fed's policy remains restrictive and appropriate.

Powell also mentioned that some service industry inflation is catch-up inflation, the labor market is cooling, and wage growth is still above the final equilibrium level, but is falling back to a more sustainable level. The service industry is generally more difficult to reduce inflation. Powell emphasized that the balance of the labor market is moving in a better direction.

When Powell talked about the September rate cut, he adhered to his consistent view that monetary policy has two-way risks. Cutting interest rates too early may reignite inflationary pressures, while if the rate cut is too late, the Fed may cause unnecessary damage to the economy.