Jackson Hole: US Federal Reserve Chairman Jerome Powell Gave a strong message on Friday: The irrigated Interest rates are likely to rise further in the coming months and the focus is on tackling the highest inflation in four decades.
Powell has warned more clearly than ever that the Fed’s continued tightening of credit will be a pain for many households and businesses as its higher rates further slow the economy and potentially lead to job losses. Is.
“These are the unfortunate costs of reducing inflation,” he said in a high-profile speech at the Fed’s annual economic symposium. jackson hole, Wyoming, “But a failure to restore price stability will mean far more pain.” Investors were hoping for a sign that the Fed may soon reduce its rate hike later this year if inflation were to show signs of easing further. But Powell indicated that time may not be near. In early trading, the Dow Jones was down 1.7%, the S&P 500 was down 2.1%, and Nasdaq was down 2.6%.
After raising its key short-term rate by 75bps (100bps = 1 percentage point) in each of its last two meetings – part of the Fed’s series of fastest rate hikes since the early 1980s – Powell said the Fed would reduce that pace. could “at some point” – suggesting that no such slow motion is imminent.
Powell said the size of the Fed’s rate hike – whether 50 or 75 bps – at its next meeting in late September will depend on inflation and jobs data. However, an increase of any size would exceed the Fed’s traditional 25 bps increase, a reflection of how severe inflation has become.
Powell’s speech is the marquee event of the Fed’s annual economic symposium in Jackson Hole, the first time since 2019 that the central bankers’ conference is being held in person, after going virtual for two years during the pandemic.
Powell has warned more clearly than ever that the Fed’s continued tightening of credit will be a pain for many households and businesses as its higher rates further slow the economy and potentially lead to job losses. Is.
“These are the unfortunate costs of reducing inflation,” he said in a high-profile speech at the Fed’s annual economic symposium. jackson hole, Wyoming, “But a failure to restore price stability will mean far more pain.” Investors were hoping for a sign that the Fed may soon reduce its rate hike later this year if inflation were to show signs of easing further. But Powell indicated that time may not be near. In early trading, the Dow Jones was down 1.7%, the S&P 500 was down 2.1%, and Nasdaq was down 2.6%.
After raising its key short-term rate by 75bps (100bps = 1 percentage point) in each of its last two meetings – part of the Fed’s series of fastest rate hikes since the early 1980s – Powell said the Fed would reduce that pace. could “at some point” – suggesting that no such slow motion is imminent.
Powell said the size of the Fed’s rate hike – whether 50 or 75 bps – at its next meeting in late September will depend on inflation and jobs data. However, an increase of any size would exceed the Fed’s traditional 25 bps increase, a reflection of how severe inflation has become.
Powell’s speech is the marquee event of the Fed’s annual economic symposium in Jackson Hole, the first time since 2019 that the central bankers’ conference is being held in person, after going virtual for two years during the pandemic.