Federal Reserve Chairman Powell displayed a relatively hawkish stance in his latest speech, prompting the market to reassess the future direction of monetary policy. Although the interest rate remained unchanged in July, Powell expressed concerns about the current economic situation, particularly regarding the inflation issue.

Powell's speech highlighted several key aspects:

First, his attitude towards the impact of trade policy has changed. Powell now believes that tariffs may bring about persistent inflationary pressures, which differs from the previous view that they were a one-time impact. This indicates that the Federal Reserve is placing greater importance on the long-term economic effects of trade policy.

Secondly, regarding whether there will be a rate cut in September, Powell emphasized that decisions will be based on comprehensive economic data, including inflation, employment, and overall economic activity. This data-driven approach demonstrates the Federal Reserve's prudence in policy-making.

Powell also pointed out that although the overall job market is stable, both supply and demand in the labor market are weakening, suggesting potential structural risks. At the same time, he specifically mentioned the recent weakening of consumer spending, considering it a noteworthy change.

Regarding inflation issues, Powell believes there is still a certain stickiness, especially against the backdrop of slowing growth in the service sector. He emphasized the need to closely monitor the further impact of tariffs on prices and pointed out that consumers will bear part of the tariff costs, which may be related to the current weakening of consumption.

Powell reiterated the independence of the Federal Reserve, emphasizing that current decisions are not influenced by political factors. He also cleverly responded to Trump's visit to the Fed, expressing welcome but not delving into policy content, demonstrating an attitude of maintaining professional boundaries.

Regarding the issue of the US dollar weakening, Powell clearly stated that this falls under the responsibilities of the Treasury, delineating the boundary of responsibility.

Powell's speech overall maintained a tough stance against inflation and did not release positive signals for a rate cut in September. After this statement, market expectations for a rate cut in September significantly decreased, falling from 63.1% before the speech to 47.1%. This indicates that the market is reassessing the future policy direction of the Federal Reserve, and it is expected that monetary policy may continue to remain tight in the short term.