On Thursday local time, Fed Chairman Powell stated that due to the recent 'very strong' performance of the US economy, the Fed does not need to 'rush' to lower interest rates. They will carefully observe to ensure that certain inflation indicators remain within an acceptable range.

After Powell made this 'hawkish' statement, the US dollar index surged by 30 points in the short term, dropping back below 107 levels. Spot gold prices fell by $10 in the short term, and risk assets including US stocks and bitcoin all declined.

He claimed, 'The economy has not sent any signals that we need to rush to lower interest rates. The economic strength we currently see gives us the ability to make cautious decisions.'

Last week, Fed officials cut interest rates by 25 basis points for the second consecutive time. They have hinted that they are willing to further cut rates as long as inflation continues to slow down. Powell's remarks seem to agree with some of his other colleagues, advocating for a gradual approach to future rate cuts.

Data released by the US Department of Labor on Wednesday showed that CPI in October rose by 2.6% year-on-year, meeting market expectations. However, it rebounded slightly from the previous month's 2.4%, putting an end to the 'six consecutive declines' in CPI; Core CPI remained at 3.3% as in September.

PPI data for Thursday showed that US PPI rose by 2.4% year-on-year in October, in line with market expectations of 2.3%, showing a rebound similar to the CPI data; Core PPI increased by 3.1% year-on-year, slightly higher than the market's expected 3%.

"The inflation rate is approaching our long-term target of 2%, but has not yet reached it," Powell said. "We are committed to achieving this. As the labor market conditions are generally balanced, inflation expectations are well anchored. I expect inflation to continue to move towards the 2% target, although the road may sometimes be bumpy."

Powell reiterated that the Fed's policy rate path will depend on the upcoming data and the evolution of economic outlook, will closely monitor core indicators of goods and services inflation excluding housing, these indicators have been declining over the past two years.

Powell did not comment on the possibility of a rate cut at the December meeting. If President-elect Trump fulfills his campaign promises, such as tax cuts, immigration restrictions, and additional tariffs, next year's monetary policy may face resistance, and policy uncertainty may lead the Fed to adopt a more cautious attitude towards rate cuts.

The US economy continues to expand at a strong pace, with an average growth rate of about 3% over the past two years. At the same time, the labor market has cooled but remains resilient. Powell stated that the labor market is in a 'solid state' and has cooled from an overheated post-pandemic rebound to 'more normal levels' based on many indicators.

When discussing Trump's influence, Powell pointed out that it is too early to judge the impact of Trump's policies. When making decisions, we do not consider the interests of any political party. The Fed's independence means that monetary policy decisions cannot be reversed or reviewed by the government.