2023-08-23 19:06:00
Federal Reserve Chairman Jerome Powell will detail the final steps in the Fed’s campaign to curb inflation when he speaks in Jackson Hole, Wyoming, on Wednesday, reinforcing his commitment to completing the mission. It seems that
The speech may not be as dramatic as the keynotes of the last few years, but it comes at what Powell himself calls the most difficult stage in the fight once morest inflation. . At a time when it is difficult to ascertain what kind of impact the monetary authorities’ actions have had on the economy, it is difficult to gauge how much further tightening is necessary.
Until recently, the path was clear. It would have been better to keep raising interest rates to curb the rapid pace of inflation. But as inflation continues to slow, it has moved to a stage where officials are divided over how much more needs to be done. The chairman is likely to use his remarks to outline how the Fed will decide whether to raise rates further and when to cut them.
US PCE Composite Price Index, Core Price Index, Effective FF Interest Rate
Source: U.S. Bureau of Economic Analysis, New York Fed.
Former Fed Vice Chairman Donald Cohn said: “Chairman Powell will put a nail in the coffin for premature easing. “I think it would be useful for the chairman to spell out what the data-dependent stance means and to limit the market from reacting too strongly to each piece of data,” he said.
Chairman Powell will address the Kansas City Fed’s annual symposium at 10:05 am ET on Thursday, May 25. European Central Bank (ECB) President Christine Lagarde is also scheduled to speak on the same day.
“Given broad views within the Fed, we believe Chairman Powell will put forward his preferred slow-moving risk management strategy,” said Ana Wong, chief U.S. economist at Bloomberg Economics. “The Federal Open Market Committee (FOMC) will need to wait a few more meetings to better judge the estimate of the natural rate of interest.”
Original title:Powell to Map Final Steps in Inflation Fight at Jackson Hole(excerpt)
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