Fed Chair Powell made clear in a recent speech that services inflation is what concerns him most, and that interest rates are approaching the level the Fed wants to see. That makes a 0.5 percentage point rate move for the Fed's December meeting most likely.
Powell was candid that the Fed does not know precisely where peak interest rates should be, so moving more slowly on rates as that point approach appeared a prudent risk-management strategy.Powell shared that one metric he is watching very closely is wage inflation. He sees a clear imbalance in the U.S. jobs market as demand outstrips supply, in part as many older workers left the workforce during the pandemic and have not returned.
This is pushing up wages, which in turn, is driving up service prices in Powell’s view. For example thePowell is not ready to step back from the inflation fight after a positive month of CPI data. He expects the Fed to continue to keep rates high until it is clear that inflation is trending back to the Fed’s 2% target. That means another hike in December and holding rates at high levels until inflation data is a lot more encouraging.
He will be watching wage inflation closely, since he is more confident that the costs of goods and housing are starting to decline. Still Powell’s tone is softening compared to the Jackson Hole speech he gave in late summer. The battle with inflation may not be over, but rate hikes may be coming to an end in the coming months.
France Dernières Nouvelles, France Actualités
Similar News:Vous pouvez également lire des articles d'actualité similaires à celui-ci que nous avons collectés auprès d'autres sources d'information.
Fed Chair Powell says smaller interest rate hikes could start in DecemberFederal Reserve Chairman Jerome Powell confirmed Wednesday that smaller interest rate increases are likely ahead.
Lire la suite »
Smaller rate hikes are likely coming in December, says Fed Chair Powell | CNN BusinessThe Federal Reserve could pull back on the pace of its aggressive rate hikes as soon as December, Fed Chairman Jerome Powell said Wednesday at an economic forum.
Lire la suite »
Fed chair Powell: No 'clear progress' toward lower inflationFederal Reserve chair Jerome Powell said there isn't yet 'clear progress' that decades-high inflation has turned a corner, despite rapid interest rate increases and slowing economic growth.
Lire la suite »
Breaking: Fed chair Powell speech sends US Dollar lowerThis is a developing story Fed Chair Powell’s policy speech is a key event today: Watch live: Fed Powell speech In his first comments since the post-
Lire la suite »
Fed Chair Jerome Powell is once again the center of attention for marketsRecent comments from St. Louis Fed president Bullard and vice chair Brainard have everyone convinced Powell will pull another Jackson Hole on Wednesday.
Lire la suite »
USD/JPY looks to regain 139.00 amid sluggish yields, Fed Chair Powell eyedUSD/JPY remains sidelined around 138.80, despite picking up bids to snap two-day uptrend during early Wednesday morning in Tokyo. In doing so, the Yen
Lire la suite »