Big Fluctuation warning! Powell will deliver the annual monetary policy at Congress tonight. Will there be any changes in the pace of Fed rate cuts?

Fed Chairman Powell will attend the Senate Banking Committee hearing at 23:00 Taiwan time on the 11th, and deliver the semi-annual monetary policy testimony. He will also attend the House Financial Services Committee at the same time the next day. The market is closely following Powell's remarks on monetary policy, which is expected to have an impact on the market. (Background: Fed officials claim 'strong employment, inflation close to 2%' reaching neutral interest rate) The Fed's official website schedule shows that Fed Chairman Powell will attend the Senate Banking Committee hearing at 23:00 Taiwan time on the 11th to deliver the semi-annual monetary policy testimony, and the next day at 23:00 in the House Financial Services Committee. Bloomberg reported that lawmakers from both parties are expected to ask about the impact of Trump's policies on banking regulation, the Fed's DEI policy reversal, monetary policy, and other issues. Powell's semi-annual monetary policy testimony, which coincides with the uncertainty brought by Trump's trade, tax, immigration, and regulatory policies to the US economic outlook, further complicates the Fed's efforts to curb inflation and maintain a healthy job market. Focus on monetary policy Since 2021, the Fed has been unable to achieve the 2% inflation target, which may attract attention from lawmakers. French Hill, the newly appointed Chairman of the House Financial Services Committee, said that many lawmakers are concerned about the Fed's policies after the pandemic. Since September last year, the Fed has lowered the benchmark interest rate by 1%. Reports indicate that Fed officials currently want to temporarily pause the rate cut and evaluate its economic impact. Therefore, Powell has no reason to deviate from this trend, especially since the January nonfarm employment data showed strong employment with the unemployment rate dropping to 4% and the inflation rate still above the Central Bank's target level. Regarding the market's concern about whether Trump will influence the interest rate decision, he expressed dissatisfaction with Powell after the Fed decided to maintain the interest rate in January. However, his attitude has softened recently. On the 2nd, Trump praised the decision to keep the interest rate unchanged as the 'correct decision', and US Treasury Secretary Scott Bessent also said last week that 'he believes Powell will do the right thing, so he will not be criticized'. Some Democratic lawmakers may question Powell about Trump's tariffs on Canada and Mexico and the potential impact of tariffs on economic growth and inflation. Powell has always been conservative in his comments on Trump's policies, but under questioning from lawmakers, he may have a more explicit stance. French Hill said that he follows the Fed's upcoming 2020 monetary policy framework review and emphasized that 'the Fed's assessment of the inflation target, as well as its analysis and planning for inflation, is a focus for policymakers in Washington'. Caution on rate cuts Credit Suisse analyst Ipek Ozkardeskaya stated in a report that despite increasing pressure from Trump to cut interest rates, Powell is expected to be cautious about rate cuts. The US economy continues to grow steadily, the job market is healthy, and inflation remains stable. Trump's stimulus policies and tariff threats may exacerbate inflation, and Powell's cautious stance on rate cuts may boost the US dollar.