What Chairman Jerome Powell will say at the press conference following the FED’s expected 25 basis point cut in interest rates is of great importance.
The dot plot graph and statements published by the FED along with its interest rate decision were evaluated in favor of the hawkish.
Here’s what Powell said at the live press conference (refresh the page for new statements):
- Overall economic performance is strong.
- The job market has cooled due to overheating.
- Inflation is closer to the 2% target.
- Consumer spending remains resilient.
- Economic activities continue to expand steadily.
- The labor market remains robust.
- Although the unemployment rate has risen, it remains at a low level.
- Wage growth is slowing.
- Current labor market conditions are looser compared to 2019.
- The labor market is not a significant source of inflationary pressure.
- Long-term inflation expectations appear robust.
- The risks to achieving the objectives are roughly balanced.
- The interest rate range was lowered today and is moving towards a more neutral level.
- Today, the policy stance is significantly less restrictive.
- We may be more cautious in considering further interest rate adjustments.
- The Fed does not follow a predetermined path for interest rates.
- Reducing policy restrictions too slowly could severely weaken the economy and employment.
- If inflation cannot move sustainably towards 2%, policy restrictions can be lifted more slowly.
- Today’s interest rate decision was a difficult one.
- We believe that inflation is still developing more or less as expected.
- The inclusion of the phrase “magnitude and timing” in the statement regarding interest rate adjustments suggests that we are at or close to a time when we will slow down interest rate cuts.
Investors had largely expected the Federal Reserve to cut interest rates, but officials signaled some skepticism about how much and how quickly the central bank will cut rates in the future.
“What really drives long-term interest rates and the market is the expectations for a rate cut,” said Jay Hatfield, CEO of Infrastructure Capital Advisors.
Analysts say that’s consistent with the possibility that the Fed could pause interest rate cuts in January, if not longer, while central bankers assess the economy and the impact of new policies the new president will implement.
*This is not investment advice.
