Federal Reserve Chairman Jerome Powell has a notable advantage in supporting the accelerating rate hike, including raising the policy rate by 0.5 points at the Federal Open Market Committee (FOMC) meeting in May. Showed the recognition that there is.
“0.5 points will be an option at the May meeting,” Powell said at a panel debate hosted by the International Monetary Fund (IMF) in Washington on the 21st. “Monetary policy to bring inflation back to 2%.” We are fully committed to leveraging policy instruments. “
Orange: Overall CPI, White: Core CPI (both year-on-year rate of change)
Source: US Bureau of Labor Statistics
The interest rate futures market has fully factored in a 0.5 point rate hike at the FOMC meeting on May 3rd and 4th. The additional 0.5 point rate hike at the June meeting has already been factored in 100%. We also expect a third increase of 0.5 points in July.
“There is something to feel regarding the idea of moving forward,” Powell said, “it points in the direction of 0.5 points as an option.”
He admitted that the labor market is in a tight environment and pointed out that he is in an “overheated” state. As a financial authority, he said it would calm the market.
“It’s a very good labor market for workers,” he said. “It’s our job to improve the balance between supply and demand and create a better environment.”
Original title:Powell Blesses Half-Point May Hike, Backs Front-Loading Policy(excerpt)
(Add and update the Chair’s remarks on the labor market)