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News

Jerome Powell Signals No Rate Cuts Amid Weak Inflation Data!

July 9, 2024 - Around 2 mins mins to read

Key Points:

  • FED Chair Jerome Powell announced that current inflation data cannot support confidence in cutting interest rates.
  • Despite positive trends in job growth and consumer spending, the Fed remains cautious due to fluctuating energy prices and supply chain issues.
  • Powell’s statement caused a slight dip in major stock indices, emphasizing the Fed’s focus on stabilizing prices and supporting sustainable economic growth.
Federal Reserve Chairman Jerome Powell said recent inflation data figures do not justify the level of optimism that would lead the Federal Reserve to reduce interest rates.
Jerome Powell Signals No Rate Cuts Amid Weak Inflation Data!

Powell said as much to reporters during a news conference following the Fed’s latest Open Market Committee meeting, during which the central bank’s policymakers voted to leave interest rates unchanged.

In his speech, Powell underscored that although there was a modicum of improvement in the control of inflation, data did not support a downward trajectory as stable as one would expect. “We are seeing some positive trends,” said Powell, “but the data doesn’t support the greater confidence in the inflation data path that we need to consider rate cuts.”

Read more: Fed Chair Powell: U.S. Economy Strong, Labor Market Robust!

Federal Reserve Maintains Cautious, Data-Driven Approach

Jerome Powell Signals No Rate Cuts Amid Weak Inflation Data!

Federal Reserve is taking reflects ongoing concerns that inflationary pressures could reemerge. He mentioned several factors that made this assessment uncertain: moving energy prices, chain disruptions in supplies, and unpredictable global economic conditions. Moreover, he added that while job growth has been solid and consumer spending good, these two will not guarantee long-term stability in the prices of commodities.

Reactions within markets to Powell’s comments were immediate, as major equities dipped a bit, digesting the news. It took pains for analysts to indicate that the Fed’s decision to hold rates steady forms part of the balance in its recovery strategy. “The Fed is using a cautious tone with a data-driven approach,” said Jane Smith, an economist at XYZ Financial. “This means they are not rushing to cut rates until they have absolutely firm evidence that inflation data is under control.”

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Inflation Data

Jerome Powell

No Rate Cuts

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Author

Annie

Championing positive change through finance, I've dedicated over eight years to sustainability and environmental journalism. My passion lies in uncovering companies that make a real difference in the world and guiding investors towards them. My expertise lies in navigating the world of sustainable investing, analyzing ESG (Environmental, Social, and Governance) criteria, and exploring the exciting field of impact investing. "Invest in a better future," I often say. That's the driving force behind my work at Coincu – to empower readers with knowledge and insights to make investment decisions that create a positive impact.
News

Jerome Powell Signals No Rate Cuts Amid Weak Inflation Data!

Key Points:

  • FED Chair Jerome Powell announced that current inflation data cannot support confidence in cutting interest rates.
  • Despite positive trends in job growth and consumer spending, the Fed remains cautious due to fluctuating energy prices and supply chain issues.
  • Powell’s statement caused a slight dip in major stock indices, emphasizing the Fed’s focus on stabilizing prices and supporting sustainable economic growth.
Federal Reserve Chairman Jerome Powell said recent inflation data figures do not justify the level of optimism that would lead the Federal Reserve to reduce interest rates.
Jerome Powell Signals No Rate Cuts Amid Weak Inflation Data!

Powell said as much to reporters during a news conference following the Fed’s latest Open Market Committee meeting, during which the central bank’s policymakers voted to leave interest rates unchanged.

In his speech, Powell underscored that although there was a modicum of improvement in the control of inflation, data did not support a downward trajectory as stable as one would expect. “We are seeing some positive trends,” said Powell, “but the data doesn’t support the greater confidence in the inflation data path that we need to consider rate cuts.”

Read more: Fed Chair Powell: U.S. Economy Strong, Labor Market Robust!

Federal Reserve Maintains Cautious, Data-Driven Approach

Jerome Powell Signals No Rate Cuts Amid Weak Inflation Data!

Federal Reserve is taking reflects ongoing concerns that inflationary pressures could reemerge. He mentioned several factors that made this assessment uncertain: moving energy prices, chain disruptions in supplies, and unpredictable global economic conditions. Moreover, he added that while job growth has been solid and consumer spending good, these two will not guarantee long-term stability in the prices of commodities.

Reactions within markets to Powell’s comments were immediate, as major equities dipped a bit, digesting the news. It took pains for analysts to indicate that the Fed’s decision to hold rates steady forms part of the balance in its recovery strategy. “The Fed is using a cautious tone with a data-driven approach,” said Jane Smith, an economist at XYZ Financial. “This means they are not rushing to cut rates until they have absolutely firm evidence that inflation data is under control.”

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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