U.S. Federal Reserve Chairman Powell said on the 23rd that the U.S. economy faces "two-way risks" of rising inflation and declining employment, and the impact of major changes in trade, immigration, fiscal and regulatory policies on the U.S. economy remains to be seen.

During a meeting in Rhode Island, Powell said that short-term U.S. inflation risks risks upwards and employment risks downwards, which is a challenging situation. If interest rate cuts are ¡°too radical¡± it could lead to an inflation target of 2 percent not achieved; if austerity policies areined for too long it could lead to a weak labour market.

He said that as the Federal Reserve¡¯s ¡°Brown Book¡± pointed out in September, still generally believe that uncertainty is suppressing their expectations. Consumer and enterprise confidence indicators dropped sharply in the spring and subsequently recovered, but remained below the level at the beginning of the year.

Powell said the Fed dropped interest rates by 25 basis points on the 17th due to rising employment risks, but the uncertainty about inflation remains high. The tariff hikes may take some time to spread through the supply chain and may show upward inflation in the coming quarters.

The Federal Reserve ended its two-day monetary policy meeting on the 17th and announced that it would cut the target range of the federal funds rate by 25 basis points to between 4.00% and 4.25%. This is the first time the Federal Reserve has cut interest rates in 2025 and another rate cut after three rate cuts in 2024. At this meeting, Stephen Miran, chairman of the White House Council of Economic Advisers, who was nominated by US President Trump and just became a governor of the Federal Reserve, voted only against it. He believed that the rate cut should reach 50 basis points.