Summary of Key Points from Powell's Speech on April 4

1. Monetary Policy

The Federal Reserve is conditionally waiting a bit longer before considering whether to adjust monetary policy. It feels like we don't need to rush into action; we have time.

Now is a "good opportunity" to take a step back (after a series of interest rate cuts) and wait for clearer signals.

Federal Reserve staff are working to digest this week's news (related to tariffs from U.S. President Trump) for the economic projections summary (SEP) disclosed in June.

1. Tariffs

Tariffs may continue to affect U.S. inflation, and the progress towards the 2% inflation target has recently slowed.

The short-term impact of the policy is highly uncertain, and this uncertainty should become significantly lower over the next year.

1. Inflation

It is essential to ensure that price increases do not lead to inflation.

The Federal Reserve has an obligation to anchor inflation expectations.

Tariffs may push inflation higher in the "coming quarters," potentially causing upward inflation and slowing growth.

The inflation situation in the U.S. is not the same as in the 1970s.

1. Employment

The job market seems to be generally balanced. The risks of rising unemployment and rising inflation have both increased.

"Hard Data" (such as the data used by government departments to calculate GDP) indicates that U.S. economic growth will slow, but the growth outlook remains robust.

1. Overall Economic Situation

Despite facing high uncertainty, the economy is still in good shape.

The Federal Reserve does not predict the likelihood of a U.S. economic recession, but external expectations have heightened the possibility of a recession.

1. Federal Reserve Responsibilities

The Federal Reserve is not responsible for (the Trump administration's) trade and immigration policies.

Trade, energy, climate, and immigration are not within the Federal Reserve's responsibilities.

The Federal Reserve cannot involve itself in issues that are not within our mandate (without authorization from Capitol Hill).

1. Will Trump Dismiss His Federal Reserve Chair?

I really enjoy this job; I am happy with it. This job has no certainty, and the Federal Reserve may make mistakes. I fully intend to serve out this term (as Federal Reserve Chair).

1. Market Reaction

After Powell's speech, the S&P 500 index maintained a decline of over 4%, the Dow Jones fell 1,447 points for a drop of 3.57%, the Nasdaq dropped 670 points for a decline of over 4%, the Philadelphia Semiconductor Index fell 6.59%, the Bank Index dropped 6.94%, and the Russell 2000 Index fell 4.61%