Powell's two-day hearing has ended. Overall, it is favorable. Inflation is no longer a determining factor for interest rate cuts. The probability of a rate cut in September remains at 73%. Pay attention to the CPI data tonight!
Looking at the labor data for the first two months, the unemployment rate is 4.1%, a new high, and the number of unemployed people is not low, which will have a positive impact on interest rate cuts. Putting aside the inflation factor, the Fed can cut interest rates at any time!
Powell said that the Fed has made considerable progress in inflation and does not need the inflation rate to be lower than 2% before cutting interest rates. Unlike the previous focus on inflation risks, the Fed needs to pay attention to the labor market and employment, and does not consider political factors when setting interest rates.
