The US Federal Reserve decided to hold interest rates unchanged. Now financial markets are focusing on Fed chair Powell speech. Here is the breakdown.
Jereome Powell
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The economy has made significant progress toward goals. The economy is strong overall.
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Activity in the housing sector seems to have stabilized. Investment in equipment appears to have slowed.
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2024 GDP looks to have risen above 2%. Inflation has moved much closer to goal, somewhat elevated.
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The economy has made significant progress toward goals.
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Labor market conditions broadly balanced. Unemployment rate has stabilized and remains low.
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Longer-term inflation expectations appear well-anchored. The labor market is not a source of inflationary pressures.
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Risks to achieving goals roughly in balance.
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Total PCE rose 2.6% in 12 months to December, core PCE rose 2.8%.
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We do not need to be in a hurry to adjust policy rate.
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I'm attentive to risks on both sides of mandate.
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Review of framework will wrap up by late summer.
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Policy framework discussions began this meeting.
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Policy is well-positioned to deal with risks and uncertainties.
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I will adjust policy stance to promote goals. We are not on a preset course.
Powell signals that the Fed will not act until seeing much more than we have seen until now. Powell speech bounces towards the hawkish side, due to the indication that the Fed does not need to rush into further rates cuts and will not do very much.
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Open account Try demo Download mobile app Download mobile app- Powell does not comment on Trump's words on interest rates
- Policy is further restrictive, but less so than it was before. Fed has made strong progress on inflation
- Fed needs to see clear progress in inflation or weak labor market to decide to cut
- Recent data has been good - inflation consistent with reaching target within the forecast timeframe, good labor market data
Source: xStation5
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