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Federal Reserve Chairman Powell

On July 15 local time, Federal Reserve Chairman Powell said at an event in Washington that the Federal Reserve has made some progress in controlling inflation in the second quarter of this year, and the pace of price increases in the United States is returning to the Federal Reserve's goals in a sustainable manner, which has enhanced people's confidence to a certain extent.

Regarding when to cut interest rates, Powell said that he had no intention of sending any signal about when the Fed would cut interest rates. It would be inappropriate to relax policy until the Fed was more confident that inflation could recover to 2% on a sustainable basis. The Fed has been waiting for this time point.

"We didn't gain any additional confidence in the first quarter, but the data from the second quarter did increase our confidence," Powell said.

Powell also reiterated his views on interest rate cuts last week. He said that central bank policies have "long and variable lags" and if interest rates are cut after inflation falls to around 2%, the tightening policies being implemented or the existing tightening levels are still having an impact, which may cause inflation to fall below 2%.

In addition, Powell also said that the Fed has begun using ChatGPT, but not for financial feedback, but for drafting questions that may be asked at press conferences. He believes that the questions drafted by ChatGPT are not as good as the questions asked by reporters.

Data released by the U.S. Bureau of Labor Statistics on July 11 showed that the U.S. CPI rose 3% year-on-year in June, lower than the market expectation of 3.1% and the previous value of 3.3%. As of press time, data from CME Group showed that the market expected the Federal Reserve to maintain interest rates at 5.25%-5.5% in July with a probability of 93.8%; and expected a 25 basis point cut in September with a probability of 91.9%.