Fed Chair Powell indicated a cautious stance on the labor market, suggesting downside risks to employment have increased. He noted that payroll gains have slowed due to declining labor force growth stemming from lower immigration and participation. Powell reiterated that longer-term inflation expectations remain anchored at the Fed's two percent target. He also stated that the central bank plans to cease its balance sheet runoff in the coming months. This decision is aimed at avoiding market strains similar to those experienced in September 2019. Bloomberg analyst Ira Jersey highlighted Powell's focus on the balance sheet and the potential end of quantitative tightening. Powell acknowledged the inherent dilemma of monetary policy: acting too quickly risks leaving inflation unchecked, while acting too slowly could cause painful employment losses. Despite the lack of recent economic data, Powell's remarks carried significant market weight. Investors interpreted his comments as conducive to further rate cuts, with market probabilities for October and December remaining high. Powell's speech also touched on the Fed's balance sheet as a crucial policy tool, particularly when the policy rate is near its effective lower bound. He discussed the balance sheet's role during the pandemic in supporting markets and fostering accommodative financial conditions.