On Wednesday, the Fed chair Jerome H. Powell commented on talk of interest rate cuts and implied more rate hikes could be on the horizon. In an interview with Bloomberg, he said that “it would be premature to talk about cutting rates” and that it “was not something that was currently on the table.”
Given the current economic conditions, the Federal Reserve has not increased rates since December 2018. Mr Powell’s comments appear to suggest that the US central bank could be looking to take a more hawkish stance in the near future.
In the interview, Powell said that it was too early for the Fed to consider rate cuts due to the uncertainty in the global economy. He added that “the Fed was closely watching the development of trade tensions and economic data in order to determine the best course of action going forward.”
The US economy is currently showing signs of strength, with unemployment near record lows and inflation close to the central bank’s target. This suggests that there is no immediate cause for concern about the economy, and that the Fed is unlikely to make a shift in direction regarding rates.
The markets appeared to take Mr Powell’s comments in stride, and US stocks ended the day higher. Investors are likely waiting to hear from other Fed members before making any major decisions.
The Fed chair’s comments appear to be in line with expectations that the central bank will be looking to achieve further increases in rates before considering a shift to easing monetary policy. With Mr Powell making it clear that a rate cut is not currently on the horizon, investors will now be hoping that the data continues to show signs of strength in order to prevent the need for more rate hikes.
On Wednesday, the Fed chair Jerome H. Powell commented on talk of interest rate cuts and implied more rate hikes could be on the horizon. In an interview with Bloomberg, he said that “it would be premature to talk about cutting rates” and that it “was not something that was currently on the table.”
Given the current economic conditions, the Federal Reserve has not increased rates since December 2018. Mr Powell’s comments appear to suggest that the US central bank could be looking to take a more hawkish stance in the near future.
In the interview, Powell said that it was too early for the Fed to consider rate cuts due to the uncertainty in the global economy. He added that “the Fed was closely watching the development of trade tensions and economic data in order to determine the best course of action going forward.”
The US economy is currently showing signs of strength, with unemployment near record lows and inflation close to the central bank’s target. This suggests that there is no immediate cause for concern about the economy, and that the Fed is unlikely to make a shift in direction regarding rates.
The markets appeared to take Mr Powell’s comments in stride, and US stocks ended the day higher. Investors are likely waiting to hear from other Fed members before making any major decisions.
The Fed chair’s comments appear to be in line with expectations that the central bank will be looking to achieve further increases in rates before considering a shift to easing monetary policy. With Mr Powell making it clear that a rate cut is not currently on the horizon, investors will now be hoping that the data continues to show signs of strength in order to prevent the need for more rate hikes.
