Key points of Powell's heavyweight hawkish press conference explained in one article (Chinese-English comparison)

Powell's intention is to emphasize that, first of all, any interest rate cut decision made by Fed officials will depend on the current economic situation and data. Currently, the risks between the two major missions of inflation and employment have reached a balance, so it is time to start cutting interest rates to boost the labor market.

Secondly, the Fed will make decisions at each meeting sequentially, without being influenced by market expectations of interest rate cuts, and will not consider any political factors or issues, but will take action at a "speed appropriate at the time".

Thirdly, Powell does not believe that a significant interest rate cut indicates that a US economic recession is imminent, nor does it indicate that the job market is on the brink of collapse. The interest rate cut is more of a preventive action to maintain the "robust" status of the economy and labor market.

Fourthly, he acknowledges that non-farm employment may be revised downwards, but it is still an important data point worth considering. Other labor data that the Fed is concerned about include: unemployment rate, employment rate, wage growth, ratio of job vacancies to unemployed persons, resignation rate, and other indicators:

The key point is not the level of specific numbers, but that the situation has changed in the past few months. The upward risk of US inflation has indeed decreased, while the downward risk of employment has increased, so the Fed is now adjusting its policy stance to support employment.

The following is the full transcript of the Q&A session at the September FOMC press conference organized by Wall Street News:

Question 1: Strong third quarter GDP running 3% so what changed to make the committee go 50. And how do you respond to the concerns that perhaps it shows the Fed is more concerned about the labor market, and should we expect more 50s in the months ahead? And based on what should we make that call?

Answer 1:

Let me jump in. So since the last meeting, we have had a lot of data come in. We've had the two employment reports for July and August. We've also had two inflation reports, including one that came in during the blackout periodWe had the QCW report, which suggests that the payroll report numbers that we're getting may be artificially high and will be revised down. You know that we've also seen that anecdotal data like the Beige Book, so we took all of those, and we went into blackout, and we thought about what to do, and we cleared that this was the right thing for the economy, for the people that we serve, and that's how we made our decision. So that's one question.

自上次会议以来，我们收到了很多数据，有 7 月和 8 月的两份非农就业报告，还有两份通胀报告，其中一份是在美联储官员静默期内发布的。还有 QCW 报告表明我们非农新增就业数可能被人为抬高，将会被下调。我们也看到了像美联储褐皮书这样的轶事数据，所以我们收集了所有这些数据，然后进入公开发言的静默期，我们思考该怎么做，并明确了这对经济、对我们服务的美国人民来说是正确的，这就是我们做出决定的方式。

So a couple things, a good place to start is the SEP. But let me start with what I said, which was that we're going to be making decisions, meeting by meeting, based on the incoming data, the evolving outlook, the balance of risks. If you look at the SEP, you'll see that it's a process of recalibrating our policy stance, away from where we had a year ago, when inflation was high and unemployment low, to a place that's more appropriate given where we are now and where we expect to beAnd that process will take place over time. There's nothing in the SEP that suggests the committee is in a rush to get this done. This process evolves over time.

When it comes to judging the future interest rate path, a good starting point is to look at the Summary of Economic Projections (SEP). First, we will make decisions at successive meetings based on received data, evolving outlook, and risk balance. By examining the SEP, you will find that it is a process of recalibrating our policy stance, moving away from the stance of high inflation + low unemployment rate a year ago to a stance more suitable for the current situation and our expectations. This process will unfold over time. There is no indication in the SEP that the committee is eager to complete (rate cuts) this work, this process evolves over time.

Of course, this is just a projection. This is a baseline projection. As I mentioned in my remarks, **what we actually do will depend on the way the economy evolves. If appropriate, we can expedite (rate cuts), if appropriate, we can slow down the paceIf appropriate, we can pause. ** But this is what we are considering. Again, I want to point out that the SEP is just an assessment of the committee's thoughts today, and it is the thoughts of the committee members today, assuming their specific forecasts are realized.

Question 2: The projections show that the Fed officials expect the Fed funds rate to still be above their estimate of long run neutral by the end of next year. So does that suggest you see rates as restrictive for that entire period? Does that threaten the weakening of the job market you said you'd like to avoid, or does it suggest that maybe people see the short run neutral as a little bit higher?

Answer 2:

I would really characterize it as this. I think people write down their estimate. Individuals do. I think every single person on the committee, if you ask them, what's your level of certainty around that, and they would say there's a wide range where that could fall. So I think we don't know there are model based approaches and empirically based approaches that estimate what the neutral rate will be at any given time. But realistically, we know it by its worksIn the base case, we expect to continue removing restrictions and observe how the economy reacts to it. This will guide us in assessing whether our policy stance is appropriate. Each official's personal estimate within the committee may vary significantly. Therefore, we are uncertain whether there are model-based or experience-based methods to estimate the neutral interest rate at any given time. However, we understand it through its workings. In the current scenario, we anticipate further monetary policy easing and will monitor the economy's response to it. This will inform our evaluation of whether our policy stance is suitable at each meeting.

Looking back, the policy stance adopted in July 2023 was when unemployment stood at 3.5% and inflation at 4.2%. Presently, unemployment has risen to 4.2% while inflation has decreased to slightly above 2%. Hence, it is time to adjust our policy to something more appropriate considering the developments in inflation and employment towards a sustainable level. The risks are now balanced, marking the beginning of the recalibration process towards a neutral stance. We will adjust the pace based on real-time assessmentsWhat you have is our individual accumulation of individual estimates of what that will be in the base case.

We know that upon review, we will find that the policy stance taken in July 2023 was when the unemployment rate was 3.5% and the inflation rate was 4.2%. Now, the unemployment rate has risen to 4.2%, and the inflation rate has dropped closer to 2%. Therefore, given the progress towards more sustainable levels of inflation and employment, it is time to readjust our policy to make it more appropriate. As a result, the risk balance is now balanced, which is the beginning of that process I mentioned, moving in a neutral direction. We will take action at a speed that we believe is appropriate at that time, either quickly or slowly. The dot plot represents Fed officials' individual estimates of the baseline scenario.

Question 3: How close was this in terms of the decision, you do have the first dissent by a governor since 2005. I think was the weight clearly in favor of a 50, or was this a very close decision?

Answer 3:

I think we had a good discussion. You know, if you go back, I talked about this at Jackson Hole, but I didn't address the question of the size of the cut. And I think we left it open going into blackout. So there was a lot of discussion back and forth. Good diversity of division. Excellent discussion today. I think there was also broad support for the decision that the committee voted on. So I would add, though, look at the SEP all 19 of the participants wrote down multiple cuts this year, all 19On the pacing here, would you expect this to be running every other meeting?

Answer: Once we get into next year, we're going to take it meeting by meeting, as I mentioned, we would. There's no sense that the committee feels it's in a rush to do this. We made a good, strong start to this. And that's really, frankly, a sign of our confidence, confidence in inflation is coming down toward 2% on a sustainable basis. That gives us the ability we can, you know, make a good, strong start. But, and I'm very pleased that we did to me the logic of this, both from an economic standpoint and also from a risk management standpointOnce we enter next year, we will discuss this matter meeting by meeting, as I mentioned before. The committee will not rush to do so (lower interest rates). We have made a good start. Frankly, this does show our confidence that we believe the inflation rate will sustainably decrease to 2%. This enables us to have a good start. However, I am pleased that we have done so, both from an economic and risk management perspective, the logic behind it is clear, but I think we will proceed cautiously at each meeting and make decisions as we go.

Question 5: Your colleagues in your economic projections today see the unemployment rate climbing to 4.4% and staying there, obviously, historically, when the unemployment rate climbs that much over a relatively short period of time, it doesn't typically just stop. It continues increasing. And so I wonder if you can walk us through why you see the labor market stabilizing sort of, what's the mechanism there, and what do you see as the risks?

Answer 5:

So again, the labor market is actually in solid condition, and our intention with our policy move today is to keep it there. You can say that about the whole economy. The US economy is in good shapeIt's growing at a solid pace. Inflation is coming down. The labor market is in a strong pace. We want to keep it there that's what we're doing.

So, the labor market is actually in a stable state, and the purpose of the policy measures we are taking today is to maintain this state. You could say the same for the entire economy. The U.S. economy is in good shape. It is growing at a solid pace, inflation is decreasing, and the labor market is developing strongly. We hope to maintain this state, and that's what we are doing.

Question 6: "New Fed Communications" Nick Timiraos asked, given the significant revision of recent employment data, does today's action constitute catching up, or is this larger-than-typical rate cut a result of the nominal increase in policy rates, so can we expect the pace of accelerated rate cuts to continue?

Answer 6:

multiple questions in every list. So I would say we don't think we're behind. We do not think we're. We think this is timely, but I think you can take this as a sign of our commitment not to get behind. So it's a strong move.

We don't think we are behind (the curve). We think this rate cut is timely, but I think you can see this as a sign of our commitment not to fall behind (the curve). So this is a strong move.

I think it's about we come into this with a policy position that was put in place. As you know, I mentioned in July of 2023 which was a time of high inflation and very low unemployment, we've been very patient about reducing the policy rate. We've waited. Other central banks around the world have cut many of them several times. We've waited, and I think that that patience has really paid dividends in the form of our confidence that inflation is moving sustainably under 2% so I think that is what enables us to taIf I could follow up on the balance sheet in 2019 when you did the mid-cycle adjustment, you ceased the balance sheet runoff with a larger cutToday, is there any signal inferred about how the committee would approach end state on the balance sheet policy?

Regarding the 2019 balance sheet, at that time you made a mid-cycle adjustment, stopped the balance sheet reduction, and implemented larger rate cuts. Today, is there any signal that can be inferred about how the committee will handle the final state of the balance sheet policy?

Answer 7:

So in the current situation, reserves have really been stable. They haven't come down. So reserves are still abundant and expected to remain so for some time. As you know, the shrinkage in our balance sheet has really come out of the overnight. RFP, so I think what that tells you is we're not thinking about stopping runoff because of this at all. We know that these two things can happen side by side, in a sense, they're both a form of normalization. And so for a time, you can have the balance sheet shrink, you would also be cutting rates.

问题 8：just following up on rising unemployment, is it your view that this is just a function of a normalizing labor market?Answer 8:

So I think what we're seeing is clearly labor market conditions have cooled off by any measure, as I talked about in Jackson Hole and but they're still at a level. The level of those conditions is actually pretty close to what I would call maximum employment, you know. So you're close to mandate, maybe at mandate on that. So what's driving it? Clearly, payroll job creation has moved down over the last few months, and this bears watching, meant by many other measures, the labor market has returned to or below 2019 levels, which was a very good, strong labor market, but this is more sort of 2018、2017. So the labor market bears close watching, and we'll be giving it that but ultimately,We think, we believe, with an appropriate recalibration of our policy that we can continue to see the economy growing and that will support the labor market in the meantime, if you look at the growth and economic activity data, retail sales data that we just got, second quarter GDP, all of this indicates an economy that is still growing at a solid pace, So that should also support the labor market over time.

It is obvious that, no matter how you measure it, the labor market conditions have cooled down, as I mentioned at the Jackson Hole meeting, but they are still at a certain level. The level of these conditions is actually very close to what I call full employment. So close to the Fed's statutory mission, perhaps the statutory mission has already been achieved. So what is driving it? Obviously, job creation has declined in the past few months, which is worth noting. From many other indicators, the labor market has returned to or fallen below the level of 2019, when it was a very good, strong labor market, but now it is more like the situation in 2018, 2017. Therefore, the labor market needs close attention, and we will also pay attention to it, but ultimately, we believe that through appropriate policy adjustments, we can continue to see economic growth, which will support the labor market over time. If you look at the growth and economic activity data, the retail sales data we just received, and the second quarter GDP, all of this indicates that the U.S. economy is still growing steadily, so this should also support the labor market over time.

So, but again we're watching, and just on the point about starting to see rising layoffs. If that were to happen, wouldn't the committee already be too late in terms of avoiding a recession?

追问：So, we are watching again, and just as layoffs are starting to rise. If this were to happen, would the committee be too late to avoid an economic recession?What would constitute for you and the committee a deterioration in the labor market you're pricing in, basically, by the end of next year, 200 basis points of cuts just to maintain a higher unemployment rateAnswer 9:

We will be watching all of the data, so if the labor market were to slow unexpectedly, we have the ability to react by cutting rates faster. We will also be monitoring our other mandate. While we are more confident now that inflation is decreasing to 2%, our plan is for inflation to reach 2% over time. Therefore, we believe that our policy is still restrictive and should continue to be so.

I'm interested in how responsive you will be to the labor market, considering the forecast of higher unemployment and the need for significant monetary easing just to sustain itQuestioning: I'm just curious about your sensitivity to the labor market, as you predict that we will see a higher unemployment rate and that a significant amount of monetary easing policy will be needed to maintain this situation.

So you know what I would say is we don't think we need to see further deterioration in labor market conditions to bring the inflation rate down to 2%, but we have a dual mandate. And I think you can take this whole action as taking a step back. What have we been trying to achieve? We're trying to achieve a situation where we restore price stability without the kind of painful increase in unemployment that has sometimes come with disinflation. That's what we're trying to do, and I think you can take today's action as a sign of our strong commitment to achieve that goal.

What I want to say is that we believe we don't need to see further deterioration in labor market conditions to bring the inflation rate down to 2%, but we have a dual mandate. I think you can take this whole action as a step back. What have we been trying to achieve? We have been working to achieve a situation where we restore price stability without the painful increase in unemployment that sometimes comes with deflation. That's what we are working on, and I think you can see today's action as a sign of our strong commitment to achieving this goal.

Question 10: You're describing this view that you don't think you're behind when it comes to the job market. Can you walk us through the specific data points that you found to be most helpful in the discussions at this meeting? You mentioned a couple, but would you be able to walk us through what that dashboard told you as far as what you know about the job market now?You described the view that the Federal Reserve does not consider itself lagging behind in the labor market. Could you introduce to us the specific data points that you think were most helpful in this meeting? You mentioned a few, what other information in the current job market should we pay attention to?

Answer 10:

Sure. So let's start with unemployment, which is the most important indicator. You're probably at 4.2%, which is higher than before. We were used to seeing numbers in the mid to low threes last year. But looking back over the years, that's still a low and very healthy unemployment rate. Anything in the low fours indicates a strong labor market. Participation rates are at high levels, adjusted for demographics and aging, participation remains high, which is positive. Wages are slightly above the long-term sustainable level for 2% inflation, but they are gradually moving towards that level. Vacancies per unemployed individual have returned to a strong level, although not as high as beforeThere are many, many employment indicators. What do they say? They say this is still a solid labor market. The question isn't the level. The question is that there has been change over, particularly over the last few months, and you know, so what we say is, as the upside risk to inflation have really come down, the downside risk to employment have increased , and because we have been patient and held our fire on cutting wall inflate While inflation has come downThere are many employment indicators. How do they say? They say this is still a stable labor market. The issue is not the level. The issue is that, especially in the past few months, the situation has changed, so we say, as the upward risks of inflation have indeed decreased, the downward risks of employment have increased, because we have been patient, controlling inflation while it decreases. I think we're now in a very good position to manage the risks to both of our goals.

And what do you expect to learn between now and November that will help inform the scale of the cut of the next meeting?

Follow-up question: What information do you expect to learn between now and November to assist in determining the magnitude of the rate cut at the next meeting?

You know, more data. The usual. Don't look for anything else. We'll see another labor report. We'll see another jobs report. I think we get. We actually, we could to, we get a second jobs report on the day of the meeting. I think, no, no, on the Friday before the meeting. So and inflation data we'll get, we'll get all this data we'll be watching. You know, it's always a question of, look at the incoming data and ask, what are the implications of that data for the evolving outlook and the balance of risks? And then go through our process and think, what's the right thing to do? Is policy where we want it to be, to foster the achievement of our goals over timeOn the job creation, it depends on the inflows, right? So if you're having millions of people come into the labor force then, and you're creating 100,On the committee, most members felt that job openings were at such high levels that they could decrease significantly before reaching the point where job openings lead to increased unemployment and job losses. It seems that we are very close to, if not already at, that point. Therefore, any further decrease in job openings will likely result in a more direct increase in unemploymentBut it's been, it's been a great ride down. I mean, we've seen a lot of of tightness come out of the labor market in that form without it resulting in lower employment.

Therefore, I think everyone on the committee believes that the number of job vacancies is so high that it can continue to decline for a long time until it translates into a higher unemployment rate. It's hard to know when we will reach that point. You can't be very precise about these things, but what is certain is that we are very close to that point, and we may even be at that point now, so further reduction in job vacancies will more directly translate into unemployment. But this is a huge downward process. I mean, we have seen a lot of tension eased in the labor market in this way, but it has not led to a decrease in the employment rate.

Question 12: so we've heard some speculation that you may be going with the federal funds rate to three and a half, maybe under 4% and there's basically an entire generation that has experienced zero or near zero federal fund rate as something we're heading in that direction. Again. What's the likelihood that cheap money is now the norm?

Answer 12:

So this is a question. You mean, after we get through all of this, it's just a great question that we can only speculate about. Intuitively, most many, many people anyway, would say we're probably not going back to that era where there were trillions of dollars of sovereign bonds trading at negative rates,Long-term bonds trading at negative rates. And it looked like the neutral rate might even be negative. So there were people issuing debt at negative rates. It seems that's so far away. Now, my own sense is that we're not going back to that, but you know, honestly, we're going to find out. But you know, it feels to me that the neutral rate is probably significantly higher than it was back then. How high is it? I just don't think we know, it's again, we only know it by its works.

We can only speculate on this. Intuitively, most people would say that we may not return to that era when trillions of dollars of sovereign bonds were trading at negative interest rates, long-term bonds were trading at negative rates, and it looked like the neutral rate might even be negative. So there were people issuing debt at negative rates. It seems that's so far away. My feeling is that we won't return to that era, and I feel the neutral rate may be much higher than it was back then. How high is it? I don't know, we can only understand it by its effects.

One more, how do you respond to the criticism that will likely come that a deeper rate cut now before the election has some political motivations.

Yeah, so, you know, this is my fourth presidential election at the Fed, and you know, it's always the same. We're always going into this meeting in particular and asking, what's the right thing to do for the people we serveAnd we do that, and we make a decision as a group, and then we announce it, and it's always what it is. It's never about anything else. Nothing else is discussed. And I would also point out that the things that we do really affect economic conditions for the most part with a lag. So nonetheless, this is what we do. Our job is to support the economy on behalf of the American people, and if we get it right, this will benefit the American people significantly. So this really concentrates the mind, and it's something we all take very, very seriously. We don't put up any other filters. I think if you start doing that, I don't know where you stop. And so we just want to do that.

This is my fourth experience in the Federal Reserve during the U.S. presidential election, you know, it's always the same. We always ask ourselves, what is the right thing for the American people we serve. We do this, we make a decision as a group, and then we announce it, and it's always like this. It never involves anything else. No other discussions. I would also like to point out that what we do does indeed have a significant impact on the economic situation, and there is a lag effect. So despite this, this is our job. Our job is to support the economy on behalf of the American people, and if we do it right, it will greatly benefit the American people. So this really focuses our minds, and it's something we all take very, very seriously. We don't set up any other filters. Otherwise, if you start doing that, I don't know where you will stop.

Question 13: My first question is, very simply, what message are you trying to send American consumers, the American people with this unusually large rate cut?My first question is simple: What message do you want to convey to American consumers and the American people through this unusually large rate cut?

Answer 13:

I would just say that, you know, the US economy is in a good place and our decision today is designed to keep it there. More specifically, the economy is growing at a solid pace. Inflation is coming down closer to our 2% objective over time, and the labor market is still in solid shape. So our intention is really to maintain the strength that we currently see in the US economy, and we'll do that by returning rates from their high level, which has really been the purpose of which has been to get inflation under control. We're going to move those down over time to a more normal level over time,

just a follow up to that, listening to you talk about inflation moving meaningfully down to 2% is the Federal Reserve effectively declaring a decisive victory over inflation and rising pricesFollow-up question: You mentioned that the inflation rate has dropped significantly to 2%. Does this actually mean that the Federal Reserve has achieved a decisive victory in combating inflation and price increases?

Answer: No, we're not so inflation. You know what we say is we want inflation. The goal is to have inflation move down to 2% on a sustainable basis. And, you know, we're not really, we're close, but we're not really at 2% and I think we're going to want to see it be, you know, around 2% and close to 2% for some time, but we're certainly not doing, we're not we're not saying mission accomplished or anything like that. But I have to say, though we're encouraged by the progress that we have made.

Question 14:

I just want to know how the committee views the sustained housing inflation we are seeing. Do you think with such high housing inflation, overall inflation can return to the 2% target?

Answer 14:

Yeah, so housing inflation is the one piece that is kind of dragging a bit. If I can say we know that market rents are doing what we would want them to do, which is to be moving up at relatively low levels, but they're not rolling over that the leases that are rolling over are not coming down as much, and OER is coming in highYes, housing inflation is a bit of a drag. However, market rents are now doing what we want them to do, growing at relatively low levels. But the rents for renewing houses have not dropped as much, while OER is high. So, the cooling of housing inflation is slower than we expectedIt's hard to gain that out. The housing market is in part frozen because of lock in with low rates. People don't want to sell their homes, so because they have a very low mortgage to be quite expensive to refinance. As rates come down, people will start to move more, and that's probably beginning to happen already. But remember, when that happens, you've got a you've got a seller, but you've also got a new buyer, in many cases. So it's not, you know, obvious how much additional demand that would make me the real issue with housing is that we have had and are on track to continue to have not enough housing. And so it's going to be challenging. It's hard to find to zone lots that are in places where people want to live. It's all of the aspects of housing are more and more difficult. And you know, where are we going to get the supply?And this is not something that the Fed can really fix, but I think as we normalize rates, you'll see the housing market normalize. And I mean ultimately, by getting inflation broadly down and getting those rates normalized and getting the housing cycle normalized, that's the best thing we can do for householders. And then the supply question will have to be dealt with by the market and also by government.

Even, you know, how likely is this situation to occur? How would you deal with the real estate market? It's hard to know. The real estate market (supply) has been somewhat frozen by the low interest rates that people locked in before. People don't want to sell their houses because their mortgage rates are low, and the cost of refinancing is quite high. As rates drop, people will start moving more, which may already be happening. But remember, when this happens, you have a seller, but in many cases, you also have a new buyer. So, you know, how much additional demand will make me feel unclear. The real problem with housing is that we have and will continue to have insufficient housing supply. So this will be a challenge. It's hard to find zoned land where people want to live. All aspects of housing are becoming increasingly difficult. You know, where do we get the supply from? This is not a problem that the Fed can truly solve, but I think as we normalize rates, you will see the housing market normalize. I mean, ultimately, by lowering the inflation rate, normalizing interest rates, and normalizing the housing cycle, this is the best thing we can do for households. Then, the supply issue must be addressed by the market and government.

Question 15: Just following up on some of the labor market talk earlier. You know, monetary policy operates with long and variable lags, and I'm wondering how much you see being able to keep the unemployment rate from rising too much comes from the fact that you're starting to act now,Answer 15:

The operation of monetary policy has long and variable lags. I want to know how much you think the extent to which you can prevent the unemployment rate from rising too much is attributed to your current actions, which will give people more room to maneuver, rather than just because the labor market is strong. And then, if I can follow up on the next question, do you think today's 50 basis point rate cut is a response and compensation for your failure to cut rates in July?

So you're right about lags, but I would just point to the overall economy. You have an economy that is growing at a solid pace. If you look at forecasters or talk to companies, they'll say that they think 2025 should be a good year too. So there's no sense in the US economy. Basically fine, if you talk to market participants. I mean, I mean, you know, business people who are actually out there doing business. So I think, you know, I think we, I think our move is timely. I do. And as I said, you can, you can see our, our our 50 basis point move as a commitment to make sure that we don't fall behindSo you're really asking about your second question. You're asking about July. And I guess if you, if you ask, you know, if we gotten the July report before the meeting, would we have cut we might well of we didn't make that decision, but you know that we might well have, I think that's not, you know, that doesn't really answer the question that we ask ourselves, which is, let's look, you know, when at this meeting, we're looking back to the July employment report, the August employment report, the two CPI reports, one of which came, of course, during blackout, and all the other things that I mentioned, we're looking at all of those things and we're asking ourselves, what's the right what's our what's the policy stance we need to move to? We knew it's clear that we clearly, literally everyone on the committee agreed that it's time to move. It's just how big, how fast you go, and what do you think about the pass forward? So this decision we made today had broad support on the committee, and I've discussed the path ahead. Elizabeth,Very hard for me to say that's from our standpoint. I can, I can't really speak the mortgage rates. I will say, you know, that will depend on on how the economy evolves. Our our intention, though, is we think that our policy was appropriately restrictive. We think that it's time to begin the process of recalibrating it to a level that's more neutral, rather than restricted. We expect that process to take some time, as you can see in the projections that we released today,From our perspective, it's hard to say. I can't really talk about mortgage rates. I would say it depends on how the economy develops. But our intention is that we believe our policy is appropriately restrictive. We think it's time to start readjusting it to a more neutral level rather than maintaining a restrictive level. We expect this process to take some time, as you can see in the forecast we released today, if things develop as forecasted, other rates in the economy will also come down. However, the speed at which these things happen actually depends on the performance of the economy. We can't see, we can't predict the economy a year ahead.

What's your message to households who are frustrated that home prices have still stayed so high as rates have been high? What do you say to those households?

Well, I can say to the public that we had the highest we had a burst of inflation. Many other countries around the world had a similar burst of inflation. And when that happens, part of the answer is that we raise interest rates in order to cool the economy off in order to reduce inflationary pressures. It's not something that people experience as pleasant, but at the end, what you get is low inflation restoredPrice stability, restored. And a good definition of price stability is that people in their daily decisions, they're not thinking about inflation anymore. That's where everyone wants to be, is back to what's inflation, you know, just keep it low, keep it stable. We're restoring that. So what we're going through now, really, it restores it will benefit people over a long period of time. Price stability benefits everybody over a long period of time, just by virtue of the fact that they don't have to deal with inflation. So that's what's been going on. And I think we've made real progress. I completely we don't tell people how to think about the economy, of course, and of course, people are experiencing high prices, as opposed to high inflation, and we understand that's painful.

What I can tell the public is that we have experienced the highest inflation, and many other countries in the world have also experienced similar inflation. When this happens, one solution is to raise interest rates to cool the economy and reduce inflationary pressures. This is not something that people will be happy about, but ultimately, what we get is a return to low inflation. Restoring price stability. Price stability is a good definition, where people are no longer considering inflation in their daily decisions. This is what everyone hopes for, to keep inflation low and stable. We are restoring this state. So what we are going through now, really, restoring this state will benefit people over a long period of time. Price stability benefits everyone over a long period of time because they do not have to deal with inflation. This is what is happeningThank you. We're always going to try to do what we think is the right thing for the economy at that timeSo we will continue to look at that broad array of labor market data, including the payroll numbers. We're not discarding those. I mean, we'll certainly look at those, but we will mentally tend to adjust them based on the Q, C, E, W adjustment, which you referred to. There isn't a bright line, you know, it will be the light that the unemployment rate's very important, of course, but there isn't a single statistic or a single bright line over which that thing that might moveWe will continue to monitor a broad range of labor market data, including nonfarm payrolls. We will not abandon these data. What I mean is, we will definitely pay attention to these data, but we will tend to adjust them based on the QCEW adjustments you mentioned. There is no bright line, of course, the unemployment rate is very important, but no single statistic or clear line can determine one thing or another. We will look at all the data on inflation, economic activity, and the labor market at each meeting, and decide on our policy stance to promote our mandate goals over the medium term. So I can't say we have a bright line in mind.

Question 19: I know that you discussed earlier how the Fed does whatever the right thing is and nothing else factors in. But in general, can you talk about whether or not you believe a sitting US president should have a say in Fed decisions on interest rates? Because that's something that former President Trump, who obviously has his own points of view, has previously suggested, and I know the Fed is designed to be independent, but can you tell the public why you view that as so important?Sure, so countries that are democracies around the world, countries that are sort of like the United States, all have what are called independent central banks. And the reason is that people have found, over time, that insulating the central bank from direct control by political authorities avoids making monetary policy in a way that favors, maybe people who are in office as opposed to people who are not in office. So that's the idea, is that, you know, I think the data are clear that countries that have independent central banks, they get lower inflation. And so we're, you know, we're not, we do our work to serve all Americans. We're not serving any politician, any political figure, any cause, any issue, nothing. It's just maximum employment and price stability on behalf of all Americans, and that's how the other central banks are set up too. It's a good institutional arrangement which has been good for the public, and I hope and strongly,So the answer to your question is that, yes, those changes were negotiated between the agencies with my support and with my involvement, with the idea that we were going to re-propose, propose the changes that Vice Chair Barr talked about, and then take comments on themThen yesterday, there were merger reform finalizations from the other bank regulators.昨天，其他银行监管机构完成了并购改革Answer 21:

No, I think, I think, and we think they are now roughly balanced. So if you go back for a long time, the risks were on inflation. We had historically tight labor market, historically tight. There was a severe labor shortage, so very, very hot labor market, and we had inflation way above targetOn November 29th, VESYNC spent HKD 5.6445 million to repurchase 1 million sharesNow that the labor market has cooled down, partly due to our actions. So this tells you it's time to change our stance. So we did it. The significance of changing our stance is that we are gradually readjusting our policies over time to make our position more neutral. And today, I think we have made a good start in this regard. I think it's the right decision, and I think it should send a signal that we are committed to achieving a good outcome.

to a shock now that could tip it into recession?

Follow-up question: Would a significant rate cut shock the market and make it feel like a recession is imminent?

I don't think so. I don't there's as I look, well, let me look at it this way. I don't see anything in the economy right now that suggests that the likelihood of a recession, sorry, of a downturn is elevated. I Okay I don't see that, you see you see growth at a solid rate. You see inflation coming down and you see a labor market that's still at very solid levels. It's so, so I don't really see that now.

I don't think so. Currently, I don't see any signs indicating an increased likelihood of an economic recession. You see economic growth at a stable rate. You see inflation rate decreasing, and you see the labor market still at a very stable level. That's the fact, so I really don't see that now