#鲍威尔讲话 Recently, Fed Chairman Powell delivered an important speech, revealing that the Fed's monetary policy is undergoing significant adjustments.

First, Powell candidly admitted the policy mistakes of the past. He stated that the large-scale quantitative easing policy implemented during the pandemic in 2020, although necessary as a market-saving measure at the time of crisis, has lasted too long from the current perspective. The reason for not tightening the policy in a timely manner was mainly the concern of repeating the mistakes of 2013 and 2018 - when the market reacted strongly to policy tightening, leading to severe volatility.

Speaking about the current policy stance, Powell pointed out that the Fed's balance sheet reduction process, which started in 2022, is nearing its end. He particularly emphasized that the Fed will complete the finishing work with a cautious attitude to avoid excessive tightening that could lead to market liquidity stress.

What is more concerning is that Powell's remarks indicate a shift in the focus of the Fed's policy. Although the current inflation level remains relatively high, the Fed believes this is mainly a temporary phenomenon caused by short-term factors such as tariffs, and the long-term inflation risk is relatively controllable. In contrast, signs of a significant cooling in the job market have raised more concerns.

This means that the Fed's policy is shifting from strict inflation control to focusing on the health of the labor market. Against this backdrop, there is a high likelihood of continuing interest rate cuts in the future, but the specific policy path will depend on changes in economic data, and the Fed will maintain a flexible response strategy.

This policy shift may have far-reaching effects on the financial markets, and investors need to closely monitor subsequent Fed decisions and their potential impact on various assets.