Fed Chairman Powell delivered an important speech at the Jackson Hole annual meeting, attracting widespread attention from the market. This speech addressed two core issues: the direction of interest rate policy and adjustments to the monetary policy framework.

In terms of interest rate policy, the Fed seems to be at a crossroads. Although the market generally expects a possible rate cut to begin in September, Fed officials are taking a cautious stance. They believe that with inflation still high, more data is needed to support a decision on the direction of policy. Powell may continue to emphasize a high dependence on economic data rather than making a clear statement in advance. Notably, market expectations for a rate cut in September have been revised down from nearly certain to around 70%-80%.

Another focus is the potential adjustment of the monetary policy framework. Powell may announce the abandonment of the policy framework established in 2020, opting for a more traditional approach that seeks to balance inflation and employment goals. This change is part of the Fed's five-year policy assessment aimed at enhancing flexibility and resilience in responding to future economic challenges.

It is worth mentioning that this is Powell's last keynote speech at the Jackson Hole Annual Conference as the chairman of the Fed. Currently, he is facing dual pressure from the White House and the financial markets. Under the dual challenges of persistently high inflation and weak employment data, policy decision-making has become increasingly difficult.

At the same time, the independence of the Fed has also become a focus of follow. President Biden and several economists have expressed concerns that the independence of the Fed may be eroded. They believe that future changes in board members could affect the policy orientation of the Fed.

Overall, Powell's speech is not only related to short-term economic policy but also involves deeper issues such as the Fed's long-term policy framework and institutional independence, which will have a profound impact on the U.S. and even the global economy.