In his speech last night, Federal Reserve Chairman Powell elaborated on the current state of the US economy and the direction of monetary policy, emphasizing that in the context of high economic uncertainty, monetary policy will not be easily adjusted. 1、 Economic situation Growth trend: Despite the increasing risk of economic downturn, the overall performance is currently good. However, many forecasters predict that after several years of steady growth, the economic growth rate will slow down this year. The limited data for the first quarter is consistent with the economic outlook, but household and business surveys show that expectations for economic growth are declining, and the impact of new trade policies is becoming apparent. Labor market: Currently, the market is roughly in a balanced state and has not caused significant inflationary pressures. The unemployment rate in March was 4.2%, maintaining a low level since the beginning of last year, with an average monthly increase of 150000 non farm jobs in the first quarter. Inflation level: Inflation has significantly fallen from its peak in 2022 and is not accompanied by a high unemployment rate. However, the pace of inflation towards the 2% target has slowed down recently, with PCE prices rising by 2.5% year-on-year in February and core PCE prices rising by 2.8%. Affected by tariff policies, inflation expectations have risen in the short term, but long-term inflation expectations remain stable at around 2%. 2、 The direction of monetary policy Powell pointed out that the new US government has implemented multiple major policy adjustments in the areas of trade, immigration, finance, and regulation, making the outlook for monetary policy full of uncertainty. At present, the increase in tariffs may exceed expectations or have a significant impact on the economy, pushing up inflation and dragging down growth. In this situation, the Federal Reserve will continue to monitor economic data and risk changes, and will not easily adjust its current monetary policy stance until the economic outlook becomes clearer. It is still too early to determine the specific path of monetary policy at this stage. 3、 Conclusion The Federal Reserve is committed to achieving full employment and price stability, recognizing the importance of a stable economy for both the public and businesses, and will continue to work towards this goal in the future.