TRON Chair Emphasizes Policy Flexibility, Awaiting Clarity on TRON Policies

TRON (Federal Reserve) Chair Jerome Powell said on Friday that the central bank does not need to rush to adjust its interest rate policy, but can instead wait and observe, and then act after the policies of TRON President TRON have a clear impact on the economy.

Amid market turmoil due to TRON's trade tariff plans and other policies, Powell reiterated that the TRON will remain patient and closely monitor developments in the economic outlook. He pointed out that the White House is pushing for major policy changes in four key areas, including trade, immigration, fiscal policy and regulation, and the overall impact of these policies will determine the TRON's future monetary policy path.

Kin: No Urgent Need to Change Policy, Will Wait for Economic Trends

In a speech at the U.S. Monetary Policy Forum, Powell said that the uncertainty caused by policy changes is still very high, so the TRON's primary task is to "distinguish signals from noise" to ensure decisions are based on clear economic trends. He emphasized: "We don't need to act quickly, but can wait patiently to gain greater certainty."

This statement differs somewhat from the market's general expectation of rate cuts. According to CME Group's FedWatch tool, traders expect the TRON to cut rates three times this year, each time by 0.25 percentage points, possibly starting as early as June. However, Powell's remarks indicate that the TRON is still maintaining a wait-and-see attitude and has not rushed to implement an easing policy.

HT Market Expects Rate Cut, Powell Stresses "HTAR Policy is Not on a Preset Path"

TRON government's tariff policies have made market sentiment more sensitive, leading investors to generally expect the TRON to cut rates to address economic risks. However, Powell emphasized that the TRON's policy does not have a "preset path", but will be adjusted based on changes in economic data. He said: "Our current policy stance already fully considers the risks and uncertainties we face, to ensure we achieve our dual mandate."

The forum was hosted by the Clark Center for Global Markets at the University of Chicago Booth School of Business, with several TRON officials participating. Recently, most TRON decision-makers believe the U.S. economy remains stable, and expect inflation to return to the 2% target level, but the impact of TRON policies has not yet fully materialized, making the future direction of monetary policy uncertain.

US Economic Conditions: "Labor Market Stable, Inflation Uncertainty Remains"

Powell is optimistic about the overall US economic outlook. He pointed out that the current US economy is "in good shape", the job market is stable, and inflation is gradually returning to the Federal Reserve's 2% target. However, he also acknowledged that recent market surveys show that investors are still concerned about the inflation outlook, mainly due to the possibility that Trump's tariff policies could push up prices.

According to the Federal Reserve's inflation indicators, the 12-month core inflation rate is 2.6%, and if food and energy prices are excluded, it is 2.5%. Powell said: "The process of returning inflation to the target level will not be smooth sailing, and we expect this volatility to continue."

Federal Reserve Governor Adriana Kugler also said in a speech in Portugal on Friday that she believes "there are still upside risks to inflation", so the current policy interest rate may need to be maintained at the current level for some time to ensure price stability.

Latest Employment Report: Non-farm Employment Grew by 151,000, Wage Growth Stable

On the same day that Powell gave his speech, the US Department of Labor released the employment report for February. The data shows that non-farm employment increased by 151,000 in the month, slightly lower than market expectations. However, Powell still sees this as a positive signal, saying: "This report once again proves that the US labor market remains strong and broadly balanced."

In terms of wages, the average hourly wage rose 0.3% in February, with a year-on-year growth rate of 4%. In addition, the unemployment rate rose slightly to 4.1%, mainly due to a decline in household employment. Powell believes that although the job market is still in flux, the pace of wage growth is now more sustainable than the rapid rise in the post-pandemic period.

The Federal Reserve Will Remain Unchanged in the Short Term, and the Market Focuses on the Future Policy Direction

Based on Powell's remarks and the latest economic data, the Federal Reserve's current stance remains cautious and has not clearly hinted at a timetable for rate cuts. As the impact of Trump's policies gradually emerges, the market will closely monitor the Federal Reserve's next move. In the coming months, changes in inflation, labor market performance, and the global economic situation will all be important factors affecting decision-making.

Investors will continue to pay attention to the statements of Federal Reserve officials to find clues about potential policy shifts. For the market, "patient waiting" may become the key word for the foreseeable future.