Sunday, February 25, 2024
HomeEconomyPowell says Fed 'firmly committed' to fighting inflation

Powell says Fed 'firmly committed' to fighting inflation

NEW YORK (Reuters) – Wall Street’s main indexes opened lower as Federal Reserve Chairman Jerome Powell said on Thursday that the central bank is “firmly committed” to controlling inflation, fueling calls for aggressive monetary tightening worry.

Powell’s comments during a live televised discussion hosted by the Cato Institute briefly boosted Treasury yields and supported the dollar.

STORY:

MARKET REACTION:

STOCKS: S&P 500 down 8.3 points, or 0.32%, to 3,971.32 Bonds: US Treasuries 10 Annual Yield Up 4/32 to yield 3. 265%, down from 3.265% late Thursday. Forex: U.S. dollar index up 0. 32%

Comments:

RANDY FREDERICK, VP of Trading and Derivatives, Charles Schwab, Austin, TX

“Powell reiterated the Fed’s job that Congress empowers them Maintain n price stability and employment. It seems like his primary concern is price stability, which he realizes could have a negative impact on employment, but given the unbelievably low unemployment rate, he’s basically saying there’s room for the unemployment rate to rise , without causing major problems. We have weekly jobless claims today, which is the more leading number in the jobs data, not only lower, but last week’s number was also revised down — we’re basically in pre-pandemic Initial jobless claims levels. So Powell thinks there’s plenty of room for the unemployment rate to rise a little, if that’s necessary to lower prices.”

“The market was up moderately, and when he started speaking, The market is slightly less volatile. It’s hard to find a good explanation for yesterday’s move higher than the fact that 7 of the past 9 days are lower. So it could be technically oversold in nature, even though he didn’t speak, seeing the market today I wouldn’t be surprised by a slight pullback, but obviously he’s keeping his existing hawkish tone and the market still seems surprised, so they’re selling it.”

OLIVER PURSCHE, SENIOR VICE President, Wealth Advisor, New York

“Two things. First, market participants seem to have changed their minds about what the Fed is going to do. It’s important to remember that we learned many years ago The lesson, that is don’t fight the Fed. The Fed tells us they’re laser-focused “

” Second thing, from a broad economic perspective, the U.S. is in the luxury of continued labor market strength status, which means the Fed can raise rates without causing a sharp economic downturn.”

“Overall, the (inflation) trend will continue Down. But we should be prepared for small peaks here and there. It’s not going to be linear. Almost never. But the bottom line is that there’s a good chance the Fed will lower inflation without causing a severe recession.”

“The economy and labor market can absorb 75 basis point upward revisions.”

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