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Fed Chairman Powell comments on restrictive monetary policy and the fight against inflation
According to a report by finanzmarktwelt.de, the US Federal Reserve (Fed) has left interest rates unchanged. Fed Chairman Jerome Powell spoke on various topics in his subsequent press conference. He emphasized that monetary policy was restrictive and that the effects of previous tightening measures had not yet been fully felt. The Fed is committed to reducing inflation to the 2% target, although it will proceed cautiously. Powell also reiterated that the US economy is resilient and the Fed has no plans to cut interest rates. Bloomberg analysis of the Fed's decision said the rise in long-term Treasury yields reduced the need for another rate hike. However, Powell left...
Fed Chairman Powell comments on restrictive monetary policy and the fight against inflation
According to a report by finanzmarktwelt.de The US Federal Reserve (Fed) left interest rates unchanged. Fed Chairman Jerome Powell spoke on various topics in his subsequent press conference. He emphasized that monetary policy was restrictive and that the effects of previous tightening measures had not yet been fully felt. The Fed is committed to reducing inflation to the 2% target, although it will proceed cautiously. Powell also reiterated that the US economy is resilient and the Fed has no plans to cut interest rates.
Bloomberg analysis of the Fed's decision said the rise in long-term Treasury yields reduced the need for another rate hike. However, Powell left open whether further interest rate hikes to combat inflation could be considered. He stressed that policymakers cannot yet assess whether monetary policy is already tight enough to bring inflation to the Fed's 2% target. The Fed will continue to act cautiously and take its decisions on a meeting-by-meeting basis.
Markets reacted positively to the Fed's decision, with the S&P 500 index and Treasury bonds continuing their rally while the dollar fell. Traders considered the likelihood of a further interest rate hike in the coming months to be lower.
Powell's current statements and the Fed's decision could have various effects on the market and the financial industry. Cautious monetary policy and possible reluctance to raise interest rates further could help stabilize the economy and support economic growth. At the same time, however, there is a risk that a too slow adjustment of monetary policy will lead to persistently high inflation.
It remains to be seen how the economic data and global geopolitical developments will develop in the coming months. The Fed will continue to analyze important data and make decisions accordingly. Financial markets should keep an eye on the Fed's meetings in December and January for clues on future monetary policy actions.
Source: According to a report by finanzmarktwelt.de.
Read the source article at finanzmarktwelt.de