Speaking at Jackson Hole Annual Symposium in Wyoming on Friday morning, Powell told attendees the Federal Reserve Board could be considering yet another interest rate hike at its upcoming September meeting, citing an economy that is continuing to burn red hot amid the Fed's efforts to cool it down and avert a recession in 2024.
Despite a series of interest rate hikes intended to stall spending, Powell said Friday that the economy has continued to grow faster than analysts expected with high levels of spending, fueling inflation rates that were spurred on by high levels of government stimulus spending, the ongoing war in Ukraine and individual companies' price hikes designed to protect quarterly profits.
And while he did not wholly commit to another rate hike next month, he was blunt in reiterating the Federal Reserve's policy to hold the course until the current 3.2 percent inflation rate hits the Fed's 2 percent target. Federal Reserve Board Chairman Jerome Powell testifies during a hearing before the Senate Banking, Housing, and Urban Affairs Committee at Dirksen Senate Office Building on June 22 on Capitol Hill in Washington, D.C."We are attentive to signs that the economy may not be cooling as expected," Powell said during his Friday speech.
"As expected, no earth-shattering pronouncements from Chair Powell at Jackson Hole with something for each side of the monetary policy debate," Andrzej Skiba, head of BlueBay U.S. Fixed Income at RBC Global Asset Management, said in an emailed statement provided to."Still, on balance, further tightening seems more likely than not, consistent with Chair Powell's previous comments. This explains why yields moved higher in the aftermath of the press release.