Powell made a meaningful remark: There is a tension between the Fed's two main objectives—

Translate: Full employment and controlling inflation are now pointing in two opposite directions. This is not everyday language; it’s the Fed openly acknowledging—a dilemma with no clear solution—
The logic is simple: to curb inflation, high interest rates are needed, which pressure the economy and weaken the job market; to preserve employment, interest rates must be lowered and liquidity increased, risking a resurgence of inflation. Fish and bear’s paw, the Fed only has one pair of chopsticks—
Historically, every time the Fed admits that “there is a tension between the two main objectives,” it has not led to a smooth landing. In the 1970s stagflation and the 2008 crisis, this phrase appeared—and the outcomes of those times are in textbooks—
The deeper question is: what is Powell hinting at now? Is it that tariffs have pushed up inflation expectations, or that employment data is starting to loosen? Both directions worsening simultaneously is what prompts this statement—
When the Fed talks about “tension,” the market should understand: every upcoming decision will have no winners—
#鲍威尔 #Federal Reserve #滞胀 #Monetary Policy #MacroTrading