Core Viewpoint - The Federal Reserve Chairman Jerome Powell indicated that despite the recent interest rate cut, the current monetary policy stance remains "moderately restrictive," suggesting potential for further rate cuts if labor market weakness continues to outweigh inflation concerns [1][2]. Group 1: Monetary Policy and Economic Indicators - The Federal Reserve lowered the benchmark interest rate to a range of 4%–4.25%, marking the first rate cut of 2025, described by Powell as a "risk management cut" to address warning signs in the labor market [1]. - Powell highlighted the dual risks of inflation and employment, stating that rapid or excessive rate cuts could keep inflation around 3%, deviating from the Fed's 2% target, while prolonged tight policies could unnecessarily suppress the labor market [2]. - Recent data indicates a significant slowdown in U.S. job growth, complicating the assessment of economic conditions, with labor supply shrinking due to stricter immigration enforcement policies [2][4]. Group 2: Inflation Concerns - Powell emphasized the need for vigilance regarding the inflation effects of tariffs imposed by President Trump, noting that tariff increases would take time to filter through supply chains, leading to a temporary rise in price levels over several quarters [2][3]. - The latest data and surveys suggest that price increases are primarily due to tariff hikes rather than broader price pressures [3]. Group 3: Market Valuation and Financial Stability - Powell acknowledged that stock market prices are relatively high, indicating that the Fed monitors the overall financial environment and assesses whether its policies are influencing it as intended [5]. - Despite recognizing the high valuations in the stock market, Powell stated that it is not currently a time of rising financial stability risks [5].