@Bitget_zh Question 19: Inflation expectations Powell responded: "Growing deficits are weighing on expectations. The University of Michigan data is higher, but we don't believe that's true. We're in a difficult position; we need to balance the labor market and inflation." Powell got angry again, refusing to answer the independence question, and then it was over!

@Bitget_zh Question 18: A short recession Powell's response: I believe the neutral interest rate has been rising. Lower interest rates support economic activity. Our goal is to monitor financial issues very carefully. Those with lower returns are under greater pressure. But we will monitor the overall situation to avoid problems.

@Bitget_zh Question 17: Why will the balance sheet continue to shrink? Powell's response: The balance sheet is currently very small. We said we would stop at some point, and we're approaching that point now. However, the economy still has some problems, so now is not the time to consider stopping. There are many trading curves, so I often say that the long-term mission is the Fed's priority.

Question 16: The impact of high interest rates on real estate Powell's response: Housing is a very sensitive activity. During the pandemic, we lowered interest rates, and housing companies were very grateful for our support. However, now, due to inflation, we need to raise interest rates, which will affect mortgage rates, and this has already happened. Forecasting is extremely difficult, even in calm times, and it's even more complicated now. It's impossible to be more confident in our forecasts.

Question 15: The pace of job creation is declining. Powell's response: There are many ways to calculate it, but we do see a decline in new jobs. We saw this decline two months ago. What's interesting now is that supply and demand have begun to decline, but because of inflation, we still need to measure it. This level of decline is unprecedented. Earlier this week, we saw stronger-than-expected consumption data, and AI is developing well, generating economic activity. Labor force risks are real.

@Bitget_zh Question 13: The Fed doesn't consider politics, but Milan is politically motivated. What impact does this have on the Fed's independence? Powell's response: There are 12 voting members among the 19 Fed officials. Everyone has a voice, but if you want others to accept it, you need to explain your reasons. This is the only way for your colleagues to accept it. Powell seems angry.

@Bitget_zh Question 12: Impact of Tariffs Powell's response: Tariffs are primarily paid by importers, not exporters. These costs are passed on to consumers, and this is something the Federal Reserve sees.

@Bitget_zh Question 11: The relationship between AI and the labor market Powell's response: I think there's a lot of uncertainty here, and a lot of it has to do with young people. It's possible that companies that initially employed young people will adopt more AI, but this is likely only a portion of the workforce, and it's hard to say whether it will have a significant impact.

@Bitget_zh Question 10: The Fed's expanded mandate and the issue of independent review Powell's response: I won't comment. Federal Reserve reforms are ongoing, much of which is happening behind the scenes. We're currently undergoing a 10% staff reduction, and the Fed is still at the same level as it was 10 years ago. No new staff have joined. We welcome constructive criticism.

Question 9: Labor market data is showing signs of decline. Powell's response: I didn't say a 25 basis point adjustment would have an impact on the market, but it is part of our work. I believe that when we see a decline in the labor force, we need to adjust interest rates to support employment. Young people's employment is starting to decline, and the labor force participation rate is also declining, as has been the case for the past year. These factors combined have led to a weakening labor market, so we are starting to use our tools, starting with a 25 basis point adjustment. Spending and consumer spending data are both strong. Higher-income consumers are leading economic growth to 1.5% or higher, so labor market risk is low, reducing the risk of a recession.