Federal Reserve Policy Turning Point: Key Signals from Powell's Jackson Hole Speech and Market Implications

At the recent Jackson Hole Annual Meeting, Federal Reserve Chair Jerome Powell delivered what the market considers the most important speech of the year. The core message conveyed a clear signal: the Fed's policy focus has shifted significantly from solely fighting inflation to prioritizing stable employment, making a rate cut in September highly probable.
Powell emphasized that "risk balance is changing." Currently, although the core PCE inflation rate remains at 2.9%, above the 2% target, the weakening labor market is more concerning. Data shows that in July, the average monthly new jobs added in the U.S. was only 35,000, about one-fifth of the level at the beginning of the year.
Against this backdrop, Powell candidly stated that the Fed is at a complex crossroads: on one hand, addressing price pressures driven by tariffs; on the other, preventing the labor market from cooling excessively.
This speech not only signals a potential turning point in interest rates but also reveals the Fed's first major revision to its monetary policy framework since 2020. The new framework emphasizes an "inclusive" employment goal, providing greater flexibility for policy adjustments.
For risk assets like cryptocurrencies, this is undoubtedly a significant macro signal. The liquidity tightening environment of the past two years is coming to an end, and market narratives will experience sharp fluctuations as dollar liquidity is re-injected.
Overall, Powell's speech conveys a sense of "certainty within uncertainty": rate cuts are imminent, but the path ahead remains filled with structural challenges such as tariffs and immigration policy changes. Global markets are holding their breath, awaiting this liquidity shift from "tightening" to "flexibility."