On Friday, Fed Chairman Jerome Powell gave a speech at a virtual conference that briefly caused a sea change in market sentiment: "I do think it's time to taper; But I do not think it is time to raise interest rates ", also mentioned the supply chain and inflation issues in his speech, which is considered to be the so-called "eagle" camp tone, causing the three major indexes of the US stock market to fall sharply; Gold and Treasury prices also plunged.

Powell made it clear that "now is the time to taper, but not the time to raise interest rates." In addition, Powell specifically mentioned that the supply chain shortage caused by the epidemic, and the resulting higher inflation and wage pressures are "likely to persist into next year," the Fed will closely watch for signs that American households and businesses expect inflation pressures to continue, "if the Federal Reserve sees a serious risk that inflation expectations will continue to rise, it will use tools to reduce inflation."

Powell also reiterated his view that high inflation is likely to abate next year as pandemic pressures recede. "We think we can be patient and let the labor market get back on its feet," he said. Powell said that if supply chain constraints ease as expected, the service sector opens up more fully and job growth accelerates, the Fed's full employment goal is "very likely" to be achieved next year. "Our policy is well positioned to deal with a range of possible outcomes," Powell added, "and we need to watch, watch carefully, to see if the economy evolves in line with our expectations, and adjust policy accordingly."

For Powell's remarks, the Wall Street Journal analyzed that the focus of Powell's speech today is to "indicate that he is more worried about rising inflation" and seems to relax the caliber of interest rate hike. As he stressed the importance of the Fed remaining flexible in the coming months, adjusting its actions as circumstances and needs dictate, "we need to ensure that our policy is prepared for a range of possible outcomes." With the Fed already signalling next month that it will begin scaling back its $120bn monthly purchases of Treasuries and mortgage-backed securities, investors' focus is squarely on the timing of rate rises...

However, some analysts pointed out that before the FOMC monetary policy meeting on November 2 to 3, which may officially announce the Taper, and the last heavy speech before the Federal Reserve officials entered the "silence period", Powell's public speech seemed to be so "tough", but "began" to soften the inflation problem and supply bottleneck problem. There's a growing realization that the Fed can't do anything about it. When talking about the rate hike, Powell said, "Conditions for Taper are now met, but tightening policy through rate hikes is still far away."

As for high inflation in the United States, earlier this week David Einhorn, founder of hedge fund Greenlight, expressed concern about the future of inflation and was unflinching in his criticism of Powell, who heads the Federal Reserve. David Einhorn thinks the Fed has no guts to fight inflation because Powell doesn't have the guts to face the new recession that fighting inflation could bring. "Powell has done nothing about inflation," he said. "He has not only failed to fight inflation, but he has persisted in policies that create inflation." David Einhorn also sees a gloomy outlook for inflation, saying: "Inflation is already happening in the US, and it looks set to get worse."

On Friday, billionaire bond investor Jeffrey Gundlach said inflation is likely to remain high through 2021 and above 4 percent until at least 2022. The head of DoubleLine Capital told CNBC that he doesn't think the current inflation is temporary and could persist for a long time due to pressures from rising housing costs and wages. "We think it is almost certain that we will end 2021 at 5 percentage points [for the consumer price index] and it will continue to move higher in the next few readings, largely thanks to energy prices." Gundlach said on a live show on CNBC. "We don't think inflation will be below 4 per cent in 2022."

One factor he cited was the cost of housing. Housing costs, which account for about a third of the CPI, have been rising steadily this year, though not as much as the overall increase. "It is almost certain that we will have sustained high inflation as a result of higher housing prices and perhaps higher wages," he said. The result, he says, is negative real interest rates, because government-bond yields remain low while inflation remains high. He called negative rates "very attractive" from an investment perspective.