[Truman]

The stock market has been volatile since Fed Chair Powell’s speech. There was a knee-jerk sell off, followed by a bounce and then another sell off.

The speech itself left an impression that the Fed is not entertaining the notion of a pivot to a rate-cut cycle anytime soon. Notably, Mr. Powell acknowledged that efforts to reduce inflation “will also bring some pain to households and businesses” but that failing to restore price stability would mean far greater pain.

[Helmholtz Watson]

Comments from Jerome Powell at the 2022 Jackson Hole symposium.

July lower inflation numbers are welcome but short of what’s needed by the Fed before confident in inflation moving down
Fed is moving policy ‘purposefully’ to a level sufficiently restrictive to return inflation to 2%
With inflation running far above 2 percent and the labor market extremely tight, estimates of longer-run neutral are not a place to stop or pause
Restoring price stability will take some time, require using central bank’s tools ‘forcefully’
Reducing inflation likely to require sustained period of below-trend growth
There will very likely be some softening of labor condition and some pain to households
There are unfortunate costs of reducing inflation but failing to restore price stability
The historical record cautions strongly against prematurely loosening policy
The longer high inflation continues, the greater the chance it will become entrenched
Estimates of longer-run neutral are not a place to stop or pause.

https://www.federalreserve.gov/newsevents/speech/powell20220826a.htm

[TradersCom]

Following up from Jackson Hole:

Fed’s Barkin is speaking in front of a Chamber of Commerce crowd in West Virginia.

– Barkin is not a voting member until 2024. He is the president of the Richmond Fed

I don’t expect inflation to come down predictably
Seeing some slowing in interest rate sectors
US faces were like inflation
The Fed’s responsibility is to reduce inflation
Fed is committed to bring inflation back down to its to percent target
we are not today in a recession
recession is a risk of the Fed in getting the inflation rate back down to 2%
interest rates will need to be restrictive

[Helmholtz Watson]

Fed Chairman Powell’s speech from the Jackson Hole Symposium in Wyoming on Friday offered little new but those hoping so were disappointed. The Fed Ch
[See the full post at: Fed’s Powell at Jackson Hole; Inflation: Progress and the Path Ahead, the Market Response]

[Author]

Posts