On September 18, following the Federal Reserve's announcement of a 25 basis point rate cut, market reactions aligned with expectations. However, during the subsequent press conference, Chairman Powell faced questions focused not on monetary policy itself, but on challenges to the central bank's independence. AUS GLOBAL believes this discussion reflects external pressures on the Fed's policy decision-making transparency and credibility, while highlighting market participants' ongoing concerns about the central bank's political neutrality.

At the beginning of the press conference, Powell was asked whether the addition of new board member Stephen Miran, who continues to serve as Chairman of the White House Council of Economic Advisers, would undermine the Fed's independence. Powell responded that the Federal Reserve remains committed to its dual mandate of full employment and price stability while maintaining its independence principles. Although he attempted to downplay the new member's impact, media questioning from various angles ultimately forced Powell to provide more detailed explanations. AUS GLOBAL notes this incident reflects market and public sensitivity to the central bank's decision-making environment, revealing concerns about whether policy objectives might be expanded or distorted.

When addressing related questions, Powell reiterated that the Federal Reserve does not acknowledge a so-called "triple mandate," viewing moderate long-term interest rates merely as a natural outcome of achieving price stability and employment objectives. He also emphasized that for any committee member to truly influence decisions, they must base their positions on strong data and economic analysis rather than mere policy statements. AUS GLOBAL believes this stance demonstrates the Fed's continued emphasis on data-driven decision-making logic in the current environment, aimed at alleviating concerns that policy might be influenced by individual voices.

Notably, in this meeting's dot plot, only one committee member supported a 50 basis point rate cut, while the other 11 supported 25 basis points. External observers widely believe this minority position came from Miran himself. Meanwhile, Powell also faced Treasury Secretary suggestions for independent review and external questions about individual board members' tenure. He cautiously responded that the Fed recently completed updates to its policy framework and remains open to constructive criticism, while avoiding commentary on specific political issues.

Regarding monetary policy, Powell clearly stated that the primary driver for this rate cut was increasing labor market risks. He noted that the current employment market is experiencing downward pressure, making risks more real than the potential concerns of several months ago. When asked whether rates should have been cut earlier, Powell responded that policy must be based on forward-looking judgment rather than lagging data revisions. AUS GLOBAL believes this indicates the Federal Reserve is gradually shifting toward a more sensitive and flexible policy path to address economic outlook uncertainty.

Discussing future policy, Powell acknowledged market expectations for further rate cuts, emphasizing this is not merely a one-time action. He also mentioned that tariffs have limited impact on inflation and employment, with some costs absorbed by intermediary businesses, but labor market weakness more likely stems from other structural factors, such as immigration changes. He emphasized that long-term inflation expectations remain anchored and the overall financial system stays healthy.

AUS GLOBAL indicates that based on Powell's overall statements, the Federal Reserve is working to maintain balance between external pressures and internal policy objectives. While risks of questioned independence exist, the central bank seeks to consolidate its credibility by emphasizing data-driven approaches and policy framework stability. AUS GLOBAL believes the Federal Reserve will continue seeking delicate balance between employment and inflation, which will become the core indicator for markets to judge its monetary policy direction.