Federal Reserve Chairman Jerome Powell on Monday vowed tough action on inflation, which he said jeopardizes an otherwise strong economic recovery. “The labor market is very strong, and inflation is much too high,” the central bank leader said in prepared remarks for the National Association for Business Economics. The speech comes less than a week after the Fed raised interest rates for the first time in more than three years in an attempt to battle inflation that is running at its highest level in 40 years. Reiterating a position the Federal Open Market Committee made Wednesday in its post-meeting statement, Powell said interest rate hikes would continue until inflation is under control. He said the increases could be even higher if necessary than the quarter-percentage-point move approved at the meeting. “We will take the necessary steps to ensure a return to price stability,” he said. “In particular, if we conclude that it is appropriate to move more aggressively by raising the federal funds rate by more than 25 basis points at a meeting or meetings, we will do so. And if we determine that we need to tighten beyond common measures of neutral and into a more restrictive stance, we will do that as well.” A basis point is equal to 0.01%. FOMC officials indicated that 25 basis point increases are likely at each of their remaining six meetings this year. However, markets are pricing in about a 50-50 chance the next hike, at the May meeting, could be 50 basis points. ‘Widely underestimated’ inflation The sudden policy tightening comes with inflation as measured by the consumer price index running at 7.9% on a 12-month basis. A measure that the Fed prefers still has prices up 5.2%, well above the central bank’s 2% target. As he has before, Powell ascribed much of the pressures coming from pandemic-specific factors, in particular escalated demand for goods over services that supply could not meet. He conceded that Fed officials and many economists “widely underestimated” how long those pressures would last. While those aggravating factors have persisted, the Fed and Congress provided more than $10 trillion in fiscal and monetary stimulus since the pandemic’s start. Powell said he continues to believe that inflation will drift back to the Fed’s target, but it’s time for the historically easy policies to end. “It continues to seem likely that hoped-for supply-side healing will come over time as the world ultimately settles into some new normal, but the timing and scope of that relief are highly uncertain,” said Powell, whose official title now is chairman pro tempore as he waits Senate confirmation to a second term. “In the meantime, as we set policy, we will be looking to actual progress on these issues and not assuming significant near-term supply-side relief.” Powell also addressed the Russian invasion of Ukraine, saying it is adding to supply chain and inflation pressures. Under normal circumstances, the Fed generally would look through those types of events and not alter policy. However, with the outcome unclear, he said policymakers have to be wary of the situation. “In normal times, when employment and inflation are close to our objectives, monetary policy would look through a brief burst of inflation associated with commodity price shocks,” he said. “However, the risk is rising that an extended period of high inflation could push longer-term expectations uncomfortably higher, which underscores the need for the Committee to move expeditiously as I have described.” Powell had indicated last week that the FOMC also is prepared to begin running off some of the nearly $9 trillion in assets on its balance sheet. He noted that the process cold begin as soon as May, but no firm decision has been made.
Chinese tech giant Tencent is exploring whether regulators will require it to create a financial holding company to house is fintech business, a top executive said on Wednesday. The comments come after Bloomberg reported last week that Chinese authorities are considering requiring Tencent to include WeChat Pay, its ubiquitous mobile payments service, in a new financial holding company. “We have been continuously exploring the establishment of the financial holding company and looking at the regulation with respect to that and whether there is a requirement for that,” Tencent President Martin Lau said on an earnings call with media Wednesday, after the firm posted its slowest revenue growth on record.
Federal Reserve Chairman Jerome Powell on Monday vowed tough action on inflation, which he said jeopardizes an otherwise strong economic recovery. “The labor market is very strong, and inflation is much too high,” the central bank leader said in prepared remarks for the National Association for Business Economics.
The speech comes less than a week after the Fed raised interest rates for the first time in more than three years in an attempt to battle inflation that is running at its highest level in 40 years.
Reiterating a position the Federal Open Market Committee made Wednesday in its post-meeting statement, Powell said interest rate hikes would continue until inflation is under control. He said the increases could be even higher if necessary than the quarter-percentage-point move approved at the meeting.
“We will take the necessary steps to ensure a return to price stability,” he said. “In particular, if we conclude that it is appropriate to move more aggressively by raising the federal funds rate by more than 25 basis points at a meeting or meetings, we will do so. And if we determine that we need to tighten beyond common measures of neutral and into a more restrictive stance, we will do that as well.”
A basis point is equal to 0.01%. FOMC officials indicated that 25 basis point increases are likely at each of their remaining six meetings this year. However, markets are pricing in about a 50-50 chance the next hike, at the May meeting, could be 50 basis points.
‘Widely underestimated’ inflation
The sudden policy tightening comes with inflation as measured by the consumer price index running at 7.9% on a 12-month basis. A measure that the Fed prefers still has prices up 5.2%, well above the central bank’s 2% target.
As he has before, Powell ascribed much of the pressures coming from pandemic-specific factors, in particular escalated demand for goods over services that supply could not meet. He conceded that Fed officials and many economists “widely underestimated” how long those pressures would last.
While those aggravating factors have persisted, the Fed and Congress provided more than $10 trillion in fiscal and monetary stimulus since the pandemic’s start. Powell said he continues to believe that inflation will drift back to the Fed’s target, but it’s time for the historically easy policies to end.
“It continues to seem likely that hoped-for supply-side healing will come over time as the world ultimately settles into some new normal, but the timing and scope of that relief are highly uncertain,” said Powell, whose official title now is chairman pro tempore as he waits Senate confirmation to a second term. “In the meantime, as we set policy, we will be looking to actual progress on these issues and not assuming significant near-term supply-side relief.”
Powell also addressed the Russian invasion of Ukraine, saying it is adding to supply chain and inflation pressures. Under normal circumstances, the Fed generally would look through those types of events and not alter policy. However, with the outcome unclear, he said policymakers have to be wary of the situation.
“In normal times, when employment and inflation are close to our objectives, monetary policy would look through a brief burst of inflation associated with commodity price shocks,” he said. “However, the risk is rising that an extended period of high inflation could push longer-term expectations uncomfortably higher, which underscores the need for the Committee to move expeditiously as I have described.”
Powell had indicated last week that the FOMC also is prepared to begin running off some of the nearly $9 trillion in assets on its balance sheet. He noted that the process cold begin as soon as May, but no firm decision has been made.
“We have been continuously exploring the establishment of the financial holding company and looking at the regulation with respect to that and whether there is a requirement for that,” Tencent President Martin Lau said on an earnings call with media Wednesday, after the firm posted its slowest revenue growth on record.
我觉得老鲍肯定是个女的 要么就是来自gates的压力有点大
市场并没有 price in，认为今年还有6次会议，一次0.25%。
市场现在很乐观，也没有price in 5月份可能开始缩表的压力。
即使有 price in 呢，也已经通过上周连涨4天把这个 “price in ” 而 price in 了
这倒是 周末其实感觉不大乐观呀
SPY纹丝不动
确实，这帮垃圾
就是因为吸取了格林斯潘的教训所以才一直不断放话和市场通气。。。经济软着陆对大家都好。
现在经济不可能软这路。 没脸书加息玩了一年 印了这么多钱 想压通胀就必须牺牲经济 没有选择
加息肯定会压制经济，只要不recession就算软着陆了。现在就业还是很strong，还是有加息条件的。
也许还没跟华尔街内部人士沟通好。都满满抛掉股票再来狠的加息吧。fed并不干净。以前清清楚楚独立，近几十年满满成了政治工具。 去年早该加息了
可能大佬们喜欢吧 要放水就放水 要他不要加息就拖着不加…. 直到大佬都觉得不行了 同一了才开始加息 我要是领导也喜欢啊