{"id":30187,"date":"2024-09-30T21:11:30","date_gmt":"2024-09-30T18:11:30","guid":{"rendered":"https:\/\/coinengineer.net\/blog\/?p=30187"},"modified":"2024-09-30T21:21:06","modified_gmt":"2024-09-30T18:21:06","slug":"jerome-powell-fed-signals-careful-rate-policy-ahead","status":"publish","type":"post","link":"https:\/\/coinengineer.net\/blog\/jerome-powell-fed-signals-careful-rate-policy-ahead\/","title":{"rendered":"Jerome Powell: Fed Signals Careful Rate Policy Ahead"},"content":{"rendered":"

On Monday, Federal Reserve Chair Jerome Powell<\/strong> underlined that the recent half-percentage-point interest rate reduction should not be interpreted as indicating that the Fed will keep acting aggressively going forward. Speaking at a Nashville event, Powell<\/strong> pointed out that the central bank’s activities will be guided by economic data since future decisions will strike a mix between inflation control and labor market support.<\/p>\n

“Looking forward, if the economy evolves broadly as expected, policy will move over time toward a more neutral stance. But we are not on any preset course<\/em>,” Powell<\/strong> said during his speech at the National Association for Business Economics. “The risks are two-sided, and we will continue to make our decisions meeting by meeting.”<\/em><\/p>\n

The declaration conforms to the recent Federal Open Market Committee (FOMC) decision of a 50 basis point reduction in the Fed’s main overnight borrowing rate. Previously only observed during crises like the COVID-19 epidemic and the 2008 global financial meltdown, this represented a rare occurrence of such a significant rate decrease.<\/p>\n

Powell<\/strong> clarified that this action was a required “recalibration” of policy meant to better match present economic reality. The Fed has been concentrated on lowering rising inflation since March 2022; now, focus has turned to a labor market that, although still strong, has exhibited indications of slowing down over the past year.<\/p>\n

“That decision reflects our growing confidence that, with an appropriate recalibration of our policy stance, strength in the labor market can be maintained in an environment of moderate economic growth and inflation moving sustainably down to our objective,”<\/em> Powell<\/strong> added.<\/p>\n

Powell<\/strong> noted that although the job market is slowing, the Fed does not think a greater drop in employment is required to lower inflation to the 2% target.<\/p>\n

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