Powell delivered his much-anticipated annual address at the Jackson Hole Symposium on Friday morning and stressed that the central bank might not be done with its tightening cycle quite yet, leaving the door open to more rate hikes.“At upcoming meetings, we will assess our progress based on the totality of the data and the evolving outlook and risks,” he said during his speech in Jackson Hole, Wyoming.
Still, Powell acknowledged that the series of rate hikes, which has brought the Fed’s interest rate target to 5.25% to 5.50%, is still expected to cause some economic slowdown and negative effects on the job market. “Two percent is and will remain our inflation target. We are committed to achieving and sustaining a stance of monetary policy that is sufficiently restrictive to bring inflation down to that level over time,” he told the gathering of economists, journalists, and government officials.
Brian Marks, executive director of the University of New Haven’s Entrepreneurship and Innovation Program, told the Washington Examiner after the speech that the tone of the speech was “somewhat hawkish.” Marks said he was surprised that the banking sector wasn’t mentioned, but said the rest of the speech was in line with expectations.
What Powell didn’t talk about is when the Fed might start cutting rates. Most investors now think that rates will remain elevated into next year, with just over 40% thinking they will be lower in May 2022 than today.
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