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September Rate Cut Expected: It is almost certain that a rate cut in September is on the table, aligning with market expectations.

Shift in Focus from Inflation to Employment: Powell's speech signaled that the Fed is now shifting its focus from inflation to employment, essentially declaring victory over inflation by stating that inflation expectations are "well anchored." The Fed's assessment is that the labor market is no longer overheated and is now balanced, though risks are increasing.

Uncertainty About Future Rate Cuts: Powell did not provide specific details on how much further rates might be cut, emphasizing that future actions will depend on incoming data. While a 50 basis points cut seems unrealistic at the moment, the Fed is likely to wait for the next non-farm payroll data before making further decisions. Powell also noted that an increase in the unemployment rate does not necessarily indicate a worsening labor market, as it could reflect more people entering the workforce and a slowdown in hiring. The Fed's stance on the labor market is one of cautious observation, with readiness to act if necessary, but without excessive concern.