Powell Speech Highlights Need To Restrict Monetary Policy
US Federal Reserve Chair Jerome Powell emphasized the importance of softening labor markets to combat inflation. He stated that the central bank is prepared to raise interest rates further if necessary.
- Powell intends to keep interest rates at a restrictive level until inflation moves sustainably towards the 2% target.
- He made these remarks at the Economic Policy Symposium, commonly known as the Jackson Hole meeting.
- The next Federal Open Market Committee (FOMC) is scheduled for September 20, 2023.
- Traders anticipate Powell’s comments on the long-term economic outlook due to ongoing macroeconomic uncertainty.
- The CME FedWatch Tool suggests a 78% trader confidence in a rate hike pause in the upcoming meeting.
Powell Stresses Fed’s Priority on Price Stability
Powell reiterates the Fed’s commitment to its inflation target and emphasizes the need for progress in non-housing services inflation.
BTC Price Reacts
Following Powell’s speech, there was a slight drop in Bitcoin price and the S&P 500 Index, but both quickly recovered. The Nasdaq Composite Index rose by 0.6%, and the Dow Jones Industrial Average showed a 0.3% increase.
Hot Take
Jerome Powell’s speech at the Jackson Hole meeting highlights the Fed’s focus on maintaining price stability and its cautious approach to raising interest rates. Crypto investors should pay attention to the impact of monetary policy decisions on Bitcoin and other digital assets.
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