Fed holds US rates steady, but markets are reluctant to buy into the more hawkish messaging
The Fed has left the Fed funds target range at 5.25-5.5% and continues to indicate the prospect of another 25bp hike this year. Longer term, the Fed is signalling less prospects of rate cuts and a diminishing chance of a recession as it guides inflation back to 2%. Given the challenges the economy faces, the market is understandably sceptical. No change from the Fed, but higher for longer is the clear message The Federal Reserve certainly delivered a hawkish pause today with the message clearly being that policymakers believe interest rates will be staying higher for longer. The Fed still have one 25bp hike in their ... (full story)
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post: FED'S POWELL: IF ECONOMY STRONGER THAN EXPECTED, THE FED MUST DO MORE. post: POWELL: OVERALL HOUSEHOLDS ARE IN GOOD SHAPE, WITH HOT LABOR MARKET, RISING WAGES
post: FED'S POWELL: THE ECONOMY APPEARS TO HAVE SIGNIFICANT MOMENTUM. post: POWELL: ENERGY PRICES BEING HIGHER IS A SIGNIFICANT THING post: Fed’s Powell: ‘Well Aware’ We Need More Than 3 Good Inflation Readings post: FED'S POWELL: WE ARE NOT LOOKING FOR A DECREASE IN CONSUMER SPENDING. post: POWELL: IT'S A GOOD THING THE ECONOMY IS HOLDING UP UNDER RATE HIKES
post: POWELL: IT MAY BE THAT THE NEUTRAL RATE HAS RISEN POWELL: MEDIAN OF NEUTRAL RATE ESTIMATE HASN'T RISEN, BUT PEOPLE ARE MOVING THEIR ESTIMATES POWELL: IT IS PLAUSIBLE THAT THE NEUTRAL RATE IS HIGHER THAN THE LONGER RUN RATE post: *POWELL: WOULDN'T CALL SOFT LANDING A BASELINE EXPECTATION post: POWELL: FOR NOW THE QUESTION IS TO TRY TO FIND THE LEVEL WHERE WE CAN STAY post: Powell: When I Answer a Question About Cutting, I Never Intend to Send a Signal About Timing post: POWELL: GDP IS NOT A MANDATE; THE QUESTION WILL BE IS THE HEAT WE SEE IN GDP REALLY A THREAT TO ABILITY TO GET TO 2% INFLATION
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