Schroders global investment notes that Powell's highly anticipated speech at the Jackson Hole global central bank symposium provided key forward-looking guidance. He acknowledged a noticeable cooling in the labor market and stated that policymakers have ample room to address more significant deterioration. However, he emphasized that the timing and pace of rate cuts depend on upcoming economic data, evolving economic outlook, and risk balance. Powell stated that they are not seeking nor welcoming further cooling in labor market conditions, leading financial markets to view his comments as slightly dovish. This provides room for a 50 basis point rate cut in September 2024. Currently, futures markets show a one-third probability of this scenario occurring, compared to around 25% previously. This could potentially be a misstep. Not only does it blur the message regarding future monetary policy easing, but it could also heighten concerns about an economic recession. From Schroders global investment's perspective, the U.S. economy is slowing down but remains robust. Given the uncertainty of the natural rate (R-star), which is the real interest rate at equilibrium, taking a cautious and data-dependent approach to removing constraints on policy is necessary. Schroders global investment still believes that the Federal Open Market Committee (FOMC) will cut rates by 25 basis points in September, assuming a rebound in U.S. employment data in August following the hurricane's impact, followed by quarterly rate cuts. The extent of the Fed's rate cuts will depend on the development of the U.S. economy, but forecasts suggest that a 100 basis point rate cut by mid-2025 or earlier will help support economic growth while effectively curbing inflation. However, Powell's comments suggest that concerns about the labor market may prompt the committee to lower rates more quickly to a lower restrictive level. Analysis shows that if the Fed were to implement the aggressive rate cuts expected by financial markets, it could potentially lead to renewed inflation pressures and compel the FOMC to raise rates again. Therefore, the committee should remain calm at this critical moment.