Quotes: Powell says Fed won't hesitate to move past neutral
Reuters
Published May 17, 2022 03:24PM ET
(Reuters) - The Federal Reserve will "keep pushing" to tighten U.S. monetary policy until it is clear inflation is declining, Fed chair Jerome Powell said on Tuesday.
"What we need to see is inflation coming down in a clear and convincing way and we're going to keep pushing until we see that," Powell said at a Wall Street Journal event. "If we don't see that we will have to consider moving more aggressively" to tighten financial conditions. The Fed will not hesitate to move beyond a neutral policy, if needed, he said.
COMMENT:
IAN LYNGEN, HEAD OF U.S. RATES STRATEGY, BMO CAPITAL MARKETS, NEW YORK
“One of the biggest takeaways from our perspective, and this is why we’re seeing the front-end of the (Treasury) market sell off, is he observed that neutral rates do not represent a stopping or looking around point. So, we’ve always known that neutral is very difficult to estimate, and so the idea that the Fed was going hike a while and then pause and look around was out there, and it was on the table, but he just told us that isn’t going to occur. Now this is very consistent with what we’ve seen in the past, which is once the Fed starts hiking, they continue to hike until something breaks. Now the question becomes is what we should be looking at as a potential break the equity market? is it credit? is it housing? I think that’s going to be this cycle’s big unknown. It’s clearly not the equity market given the price action so far year-to-date and Powell effectively said we’re going to continue hiking until inflation eases.”
“I think it was confirmation that they’re going 50 and 50 in June and July … and the big question is whether they will go 50 in September, that is the unknown.”
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.