Powell Jackson Hole Speech Simplified Version

1. Current State of the U.S. Economy
·The economic growth rate has slowed, with only 1.2% in the first half of the year, which is half of last year's rate. ·The unemployment rate is 4.2%, which is not high, but job creation has明显降温.
·Inflation remains stubborn, with core PCE at 2.9%, still not back to the 2% target. ·New tariffs are driving up prices, and this may continue in the coming months.
2. How will the policy go?
·Interest rates are already high, and monetary policy remains tight.
·Employment stability allows the Federal Reserve to be more patient, but risks are increasing.
·Powell clearly stated: there will be no preset schedule for interest rate cuts, everything depends on the data. ·If inflation is under control and employment is stable, the Federal Reserve may gradually ease.
3. Framework Adjustment
·Abandon the strategy of "allowing short-term inflation overshoot" and return to the more traditional "2% target." ·The employment goal is also expressed more cautiously, with no more excessive commitments. ·Conduct a framework review every 5 years to remain flexible.
4. Key Signals
·Short-term: There will be no rush to cut interest rates, inflation is still an issue.
·Medium-term: Interest rates are close to neutral and may be cautiously lowered in the future. ·Long-term: Returning to a prudent approach, price stability is once again the top priority.
Summary:
Powell's attitude is that "the economy is slowing down, inflation is still unstable, and employment is doing well. We are not in a hurry, but we will closely monitor the data and lower interest rates if necessary."