#JEROME POWELL SPEECH TODAY FREE#

One reason he thinks so, Powell said, is that the economy is strong now, with solid growth and the unemployment rate at a low 4%. Roger Williams, a Texas Republican, Powell said he believes the Fed can reduce inflation without tipping the economy into recession. вЂњWe understand that high inflation imposes significant hardship, especially on those least able to meet the higher costs of essentials like food, housing, and transportation,вЂќ the Fed chair said. He also pledged to use the Fed's tools to bring inflation back down to its target. Powell acknowledged that consumer price increases have jumped far above the Fed's target of 2% - inflation hit 7.5% in January compared with a year earlier - and that higher prices had persisted longer than expected. The Fed's rate is now pegged near zero, where it has been since the pandemic struck in March 2020 and the Fed responded by slashing interest rates to help support the economy. Powell is betting that with the unemployment rate low, at 4%, and consumer spending solid, the economy can withstand modestly higher borrowing costs.

And it would mark the beginning of a delicate challenge for the Fed: It wants to increase rates enough to reduce inflation, now at a four-decade high, but not so fast as to choke off growth and hiring. This month's increase would be the first since 2018. Powell spoke a day after President Joe Biden said in his State of the Union address that вЂњmy top priority is getting prices under control.вЂќ

Higher Fed rates typically lead, in turn, to higher borrowing costs for consumers and businesses, including for homes and auto loans and credit cards. Most other Fed officials have in recent weeks supported a similar modest rise, while a few have said they back a half-point hike or are at least open to such an increase. вЂњIвЂ™m inclined to propose and supportвЂќ a quarter-point rate hike to fight the acceleration of inflation that has engulfed the economy in recent months, Powell told the House Financial Services Committee on the first of two days of semiannual testimony to Congress.

#JEROME POWELL SPEECH TODAY FREE#

Get your first six issues free here.WASHINGTON (AP) - Chair Jerome Powell said Wednesday that he supports a traditional quarter-point increase in the Federal Reserve's benchmark short-term interest rate when the Fed meets later this month, rather than a larger increase that some of its policymakers have proposed.Д«ut Powell did open the door to a bigger hike in the event that inflation, which has reached a four-decade high, doesn't noticeably decline this year, as the Fed expects it to. We'll have more on all this in MoneyWeek magazine in the coming issues. It's jarring but true to say that the words Powell chooses to use will have far more impact on financial markets than whatever happens in Afghanistan today, for example.Д«ut that's the system we have, so best to understand it and try to work around it. On another note вЂ“ It is odd that one man can have such market-moving power. So I suspect he'll aim for a non-committal tone - one that won't scare markets but that won't have them piling back into inflation trades again quite yet. But I can't see that one happening either.

On the other hand, if he's very aggressive and gives the sense that tapering is in the bag, you'd expect the dollar to go up and most things to go down.

But he might also feel it's a bit premature to pre-empt the next Fed meeting. It's perfectly possible that he'll do that of course, in which case the US dollar would most likely go down and most other things go up.

Jerome powell speech today