UBS noted that Fed Chair Jerome Powell signaled a significant shift in monetary policy direction in his Jackson Hole speech. Powell's speech, along with recent data on the labor market and changes in the inflation outlook, reveals a clear shift in the Fed's priorities, according to UBS analysts. In his speech, Powell summarized the economic outlook for the first half of the year, then referenced July employment data and highlighted imbalances in the labor market. UBS said this remarks signaled a potential shift in the Fed's policy bias. According to UBS, the critical points in Powell's message were as follows: Focus on employment rather than inflation: Powell stated that the Fed will now consider employment risks as well as inflation. UBS stated that this signifies a dovish shift in policy stance. Labor market risks: Powell warned that job losses could occur rapidly and lead to sharp increases in unemployment. Inflation expectations will be monitored: Powell said that inflation is rising with temporary, not permanent, effects and that the Fed will change its stance again if necessary. According to UBS, Powell's following statements underscore the shift in direction: “Policy is now in restrictive territory; the outlook and balance of risks may require adjustments to our policy stance.” UBS notes that these statements have strengthened expectations that the Fed may cut interest rates, while markets are increasingly focused on employment and recession risks. *This is not investment advice.