CNN reported on August 22 local time that Federal Reserve Chair Jerome Powell delivered a speech at the Jackson Hole Global Central Bankers Meeting in Wyoming, hinting that the Fed may cut interest rates.

The Federal Reserve released the transcript of Powell's speech on its official website. Powell stated that due to the "shift in risk balance seems to be changing", the downside risks to employment are increasing. He also said: "Given that policy is in a restrictive area, the baseline outlook and the changing risk balance may require us to adjust our policy stance."

Although President Trump has been urging the Fed to cut interest rates since taking office, the Fed has kept interest rates unchanged for eight consecutive months, maintaining the federal funds rate within the target range of 4.25% to 4.5%. Therefore, Powell's remarks are seen as a rare signal that the Fed may cut interest rates.

Previously, the Trump administration had exerted significant pressure on the Fed. The Director of the Federal Housing Finance Agency, Bill Poole, accused Fed Governor Lisa Cook of mortgage fraud, and the Department of Justice also stated it would investigate her. Trump had also placed some "his own people" within the Fed. Michelle Bowman, the Fed's vice chair for supervision, was promoted by Trump to her current position earlier this year. She is currently actively reviewing bank regulatory rules and is generally expected to relax regulations on large banks.

After Powell hinted that the Fed may cut interest rates, the U.S. market reacted positively. The three major stock indices all closed higher, with the Dow Jones rising 1.89%, up 1.53% for the week; the Nasdaq rose 1.88%, down 0.58% for the week; the S&P 500 index rose 1.52%, up 0.27% for the week. Among them, the Dow Jones set a new high, and both the Dow Jones and the S&P 500 index continued to rise for three weeks. The KBW Bank Index rose 3.2%, reaching a new high since 2022.

Major tech stocks rose broadly, with Tesla up more than 6%, recording its largest single-day gain in two months; Intel rose more than 5%, Google and Amazon rose more than 3%, AMD and Meta rose more than 2%, Apple and NVIDIA rose more than 1%, and Microsoft rose slightly. Netflix fell slightly. Opendoor rose more than 39%, reaching a new high since August 2023.

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