Jerome Powell chairman of the Federal Reserve
Fed says interest rate tightening will slow. Here because. The comment
The Federal Open Market Committee (“FOMC”) will announce its decision today. Following remarks on May 31 by incoming Fed Vice Chairman Jefferson, Market and consensus expectations have aligned, expecting the Federal Funds rate to remain unchanged at this meeting. The probability of a hike in July has also increased.
Chairman Powell and the Fed’s top brass sounded relatively relative in their recent comments dovishwhich I take as a signal to do so, while leaving the door open for another rate hike in the future. Above all, I interpret the current focus on data reliance as a response to trend, not the ebb and flow of economic indicators month-to-month.
With an already tight policy, more spaced hikes seem appropriate. At the same time, recent improvement in residential data and still strong jobs numbers illustrate how balanced the risk-reward balance is for the Fed. The US central bank cannot abandon the fight against inflation. For this reason, I remain adamant that monetary policy easing is not expected this year and that the next move is more likely to be a hike than a pause.
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