2023-09-20 19:40:01
NEW YORK, Sept 20 (Archyde.com) – U.S. Federal Reserve (Fed) Chairman Jerome Powell warned on Wednesday that the central bank’s new forecast showing monetary policy will remain elevated for longer is not a promise to action, while reassuring regarding the economic outlook and the rise in bond yields.
Regarding the new rate forecasts, “I don’t want this to be taken as an action plan”, but rather as an outlook reflecting the expectations of Fed members, who believe that the economy American will be doing better than they predicted a few months ago.
Jerome Powell, speaking following a meeting of the Fed’s monetary policy committee, which decided to keep rates at current levels, said the Fed would make its rate decisions “meeting by meeting.”
The US central bank is “ready to raise rates further if necessary,” he added.
Furthermore, it is very likely that the Fed’s aggressive rate hikes will not lead the economy into a slowdown phase, said Jerome Powell.
“I always thought a soft landing was a plausible prospect,” he said, adding that his outlook remained unchanged even though other factors might affect the Fed’s outlook.
The rise in bond yields does not appear to indicate a lack of market confidence in the central bank.
The rise in yields, which have reached record levels since the 2008 crisis, “is not due to inflation” but to improved growth and a more abundant supply of bond securities, said the president of the Fed. (Reporting by Michael S. Derby; French version Corentin Chappron, edited by Jean Terzian)
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