08:31
Traffic jam:   1
$
92.7519
100.4425

Powell Emphasizes Inflation Concerns Amid Unchanged Fed Rate

1 November 2023
3572
2 min.
2
Powell Emphasizes Inflation Concerns Amid Unchanged Fed Rate

Fed's Bold Strategy Shift

For the first time in nearly two years, the Federal Reserve is set to keep its key short-term interest rate unchanged for a second consecutive policy meeting. This reflects a significant shift in the Fed's strategy, signaling a potential end to its rate-hiking campaign.

The Current Situation

The Fed's decision to maintain the status quo is primarily due to the overall positive trajectory of the economy. Inflation has moderated, while hiring, consumer spending, and economic growth have remained robust. Contrary to predictions, a recession has not materialized.

Challenges Ahead

However, the deceleration of inflation has slowed, and the potential for solid economic growth could elevate or further increase inflation. As a result, Chair Jerome Powell and other Fed officials are not ready to rule out future rate hikes. Powell is expected to emphasize the progress made by the central bank while underscoring the importance of managing inflation to meet the Fed's 2% target.

Diverging Trends

The Fed balances robust economic growth with turbulent financial markets, potentially causing an economic slowdown.

Market Predictions

Economists estimate recent market fluctuations could act as an effective economic brake, alleviating inflation pressures but introducing risks.

The Fed's Role

Despite raising its benchmark rate, the 10-year Treasury yield continues to rise. Factors include government bond issuances and investor demand.

The Fed's Challenge

The Federal Reserve's top priority is the ongoing increase in the 10-year Treasury yield, even in the absence of their interest rate adjustments. This suggests that Treasury yields could remain elevated, posing potential limitations on economic expansion and inflation.

The Fed's Approach

Chair Powell has emphasized the need for a cautious approach, given the impact of tighter credit on the still-healthy economy. Other Fed members share this view, preferring to monitor economic developments before making any definitive moves on interest rates.

Market Expectations

Wall Street traders are highly confident, with a 97% likelihood, that the Federal Reserve will maintain the current interest rates during the upcoming meeting. Moreover, there is a modest 29% probability of a rate increase at the December meeting.

Persons1 and Companies1 in the news

6th Chair of the Federal Reserve
1 place
Section:
Source foto:
flickr.com

Discussion

Rating companies
JP Morgan Chase
15 Mention
Instagram
13 Mention
Tesla
12 Mention
Walt Disney Company
11 Mention
Nasdaq
9 Mention
Ford Motor Company
9 Mention
Netflix
9 Mention
X (Twitter)
8 Mention

NEW YORK NEWS

News from GlobalNY.biz is the freshest and most relevant information about high-profile events in the region. The task of the resource's news feed is to convey to readers with maximum accuracy and objectivity information about important events in business, politics, economy, healthcare, culture and other spheres of life in New York.
GlobalNY.biz news is a coverage of economic processes taking place in New York, the latest news of public life, incidents and an overview of political events. New York news is information about the activities of small and medium-sized businesses, the work of housing and communal services and utilities, the implementation of significant projects.
The site's journalists describe not only the life of the region, but also talk about the current state of the US economy. Everything you need to know about innovations in the field of industry and agriculture, economy and power is collected in the "News" section at GlobalNY.biz.
New York news quickly informs the reader, shows the real picture and opens up hot topics. Communication with government structures and business enables us to provide our readers with reliable, information-rich material. The main page of the portal contains the key news of New York!
Alena Potapova

Development Director
Population
8105209993
Died this year
9170063
Born this year
22559978