Summary: Powell's comments confirmed that a September rate cut is coming, as he said "the time has come for policy to adjust", with traders on the lookout for clarity regarding the magnitude of the cut. Commenting on the speech, WSJ's Nick "NIkileaks" Timiraos put it best: "The Powell pivot is complete" and notes the following:

Powell is dovish across the board—from the same stage where he two years ago signaled the Fed would accept a recession as the price of restoring inflation:

"The cooling in labor market conditions is unmistakable."

"It seems unlikely that the labor market will be a source of elevated inflationary pressures anytime soon."

"We do not seek or welcome further cooling in labor market conditions."

"The time has come for policy to adjust. The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks."

"We will do everything we can to support a strong labor market as we make further progress toward price stability."

Powell unfurls his narrative on the causes of and behaviors of inflation since 2020. Recognizing not everyone will agree with his framing, he concludes with this:

"That is my assessment of events. Your mileage may vary."

After recounting the series of judgments that led officials to describe inflation as likely to be transitory, Powell observes how widely shared these views were outside the Fed:

"The good ship Transitory was a crowded one."