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Powell Signals No Rush to Cut Interest Rates
Fed Chair Jerome Powell suggests that interest rates may remain higher for longer due to economic strength and inflation above target.
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Canada
EconomyUs PoliticsLabour MarketInflationInterest RatesFederal ReserveMonetary Policy
Federal ReserveDallas FedJp Morgan
Jerome PowellDonald TrumpMichael Feroli
- What is Powell's view on the path of inflation and the Fed's monetary policy response?
- Powell believes inflation is on a sustainable path to 2%, enabling the Fed to gradually shift monetary policy to a more neutral stance without hindering economic growth. However, the specific neutral rate and the speed of reaching it remain uncertain.
- What are the key strengths and weaknesses of the current US economy according to Powell?
- The current economic conditions, including low unemployment, solid growth, and rising consumer spending, are considered "remarkably good" by Powell. However, key inflation measures remain above target, requiring careful monitoring by the Fed.
- What is Jerome Powell's assessment of the current economic situation and its implications for interest rates?
- Jerome Powell, Chair of the Federal Reserve, stated that the ongoing economic growth, solid job market, and inflation above the 2% target indicate no urgent need to lower interest rates. He suggests that borrowing costs may remain higher for an extended period.
- How did Powell address concerns about the potential impact of new tariffs and immigration policies on the economy?
- While acknowledging potential impacts of tariffs and reduced immigration on inflation, Powell avoided direct predictions, citing the need for clarity on new policies before making assessments. He emphasized that the economy shows no immediate signs of distress requiring hastened rate cuts.
- What was the market reaction to Powell's remarks, and how did it affect expectations about future interest rate cuts?
- Although traders still anticipate a rate cut at the December meeting, Powell's remarks led to increased yields on shorter-term Treasury bonds and reduced expectations of future rate cuts. JP Morgan's chief economist suggests that the speech could lead to a slower pace of easing.