What will Powell say tonight?

Tonight (15th) at 20:40, Federal Reserve Chairman Jerome Powell will deliver opening remarks at an event.

Although the market generally expects clues about interest rate cuts, Powell is likely to shift the focus to more substantive issues.

Some analysts believe that the core of this speech will be the Federal Reserve's assessment of its monetary policy framework, specifically the blueprint for fulfilling its dual mandate of maximum employment and price stability.

While some economists are calling for significant reforms, other analyses suggest that this year's framework update will be more subtle. Some adjustments are expected, focusing on adopting a "symmetrical" approach to inflation and improving the Federal Reserve's Summary of Economic Projections (SEP), which many critics believe lacks transparency.

Compared to the major overhaul of the framework in 2020, this adjustment will be more subtle

The last time the Federal Reserve completely overhauled its monetary policy framework was in 2020. At that time, interest rates were near zero, and the Federal Reserve was injecting liquidity into the financial system.

However, since then, the situation has changed dramatically. Inflation soared to a peak of 9.1% in 2022, prompting the Federal Reserve to take the most aggressive rate hikes in 40 years.

Although price pressures have eased somewhat, they remain above the Federal Reserve's 2% target.

This speech also comes as political pressure resurfaces. On Wednesday, Trump continued to "blast" Powell, writing:

"The Federal Reserve must lower interest rates like Europe. What’s wrong with the late Powell? Isn’t this unfair to a ready-to-thrive America? Just let it happen, it will be a wonderful thing!"

Additionally, Trump's tariff threats loom over all of the Federal Reserve's work, and trade policy may complicate the Federal Reserve's efforts.

While Thursday's market may not receive a clear timeline for interest rate cuts, Powell's remarks may provide a window into the Federal Reserve's thinking for the next decade. Investors should pay attention to the Federal Reserve's views on inflation and how it will respond to political pressures and potential trade wars