Suddenly release the hawk! Federal Reserve Chairman Powell said the economy is strong and does not need to "rush" to cut interest rates.

Federal Reserve Chairman Jerome Powell said on Thursday that the strong growth of the U.S. economy allows policymakers to be patient in deciding the extent and pace of interest rate cuts. Powell said in a speech to business leaders in Dallas, "The economy has not sent any signals that require us to be in a hurry to reduce interest rates. The strong performance of the current economy allows us to make decisions more cautiously." In his optimistic assessment of the current economic situation, the central bank leader called the U.S. economic growth the "best among the world's major economies". Specifically, he mentioned that despite disappointing job growth in October, the labor market is performing well. He attributed this to storm disasters in the Southeastern United States and labor strikes. Nonfarm payrolls increased by only 12,000 in the current period. Powell pointed out that although the unemployment rate has risen, it has stabilized in recent months and remains at historically low levels. Regarding inflation, he said that "broad" progress has been made and Fed officials expect inflation to continue to fall to the central bank's target of 2%. However, inflation data this week showed increases in consumer and producer prices, moving further away from the Fed's target. Nevertheless, Powell pointed out that the preferred inflation indicator of the Fed showed an inflation rate of 2.3% in October, while the inflation rate excluding food and energy was 2.8%. "The inflation level is getting closer to our long-term 2% target, but it has not reached it yet. We are committed to achieving this goal," Powell said. He also mentioned that the process of achieving this goal may encounter "occasional setbacks." Powell's cautious view on interest rate cuts led to a decline in the stock market and an increase in bond yields. Traders also lowered their expectations for a December rate cut. A week before he made these remarks, the Federal Open Market Committee had just lowered the benchmark lending rate by a quarter point to a range of 4.5% to 4.75%, following a half-point rate cut in September. Powell called these measures a re-adjustment of monetary policy, focusing not only on curbing inflation but also on maintaining a balance in the labor market. It is widely expected that the Fed will continue to cut rates by a quarter point in December and make several more cuts in 2025. However, Powell remains reserved about his future expectations. He stated that the Fed is seeking to guide the key rate to a neutral level that neither stimulates nor suppresses economic growth, but the final destination is uncertain. "We are confident that through appropriate adjustments to our policy stance, the strong performance of the economy and labor market can be maintained, and inflation will sustainably decline to 2%," he said. "We are gradually moving our policy towards a more neutral level, but the path to achieving this goal is not predetermined." Powell added that the process of adjusting to a neutral rate will be complex. "We balance the risks between acting quickly and slowly. We want to find a middle ground that supports the labor market and helps inflation decline," he said. "If the data allows us to slow down, then slowing down seems like a wise choice." Additionally, the Fed is still reducing its large balance sheet every month and has not disclosed when this process will end.