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Message from Fed Chairman Powell, “Our current policy stance is in line”

Powell made assessments of the US economy at the video conference event hosted by The Wall Street Journal.

Reiterating that the Fed is still far from its maximum employment and average inflation targets of 2 percent, Powell said the bank will maintain current interest rates and continue to buy assets until significant progress is made on employment and inflation targets. .

A TEMPORARY INCREASE IN INFLATION CAN BE SEEN

Powell said it will take some time to reach the maximum employment target and that it is unlikely to reach it in 2021.

Stating that a temporary rise in inflation can be seen with the recovery of the economy, Powell said: “While the economy is recovering, we expect inflation to rise with base effects. This may put some upward pressure on prices. “. saying.

Powell noted that they will be “patient” if there is a temporary rise in inflation.

INCREASE IN INTEREST ON “ATTRACTIVE” BONDS

In stating that rising bond yields are “something that catches your eye,” Powell said, “uneven market conditions or the constant tightening of financial conditions that threaten us to achieve our goals concern me.” found the evaluation.

Powell stressed that the bank is considering a wide range of financial conditions rather than a single measure.

Noting that the Fed has not made much progress in line with its objectives, Powell said: “Our current policy stance is appropriate.” used the expression.

Following Powell’s messages, US 10-year bond yields rose to 1.55 percent.

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