The Federal Open Market Committee (FOMC) of the United States Federal Reserve announced its latest statement early this morning in Taiwan. It decided to maintain the target range for the federal funds rate at 5.25% to 5.5%, which is in line with market expectations. However, Federal Reserve Chairman Jerome Powell expressed concerns about the lack of progress in reaching the 2% inflation target.
So far this year, the data has not given us greater confidence. It may take longer than previously expected to gain this confidence, and the Federal Reserve is prepared to maintain the current target federal funds rate for an appropriate period of time.
Last week’s GDP report showed a slowdown in overall growth, but prices continue to rise steadily, raising concerns about stagflation. However, Federal Reserve Chairman Powell downplayed this idea.
From certain indicators, economic growth is at 3% and the inflation rate is below 3%. I really don’t understand where this idea of stagflation comes from.
He also humorously stated:
I haven’t seen any stagnation or inflation.
Powell also ruled out the possibility of raising interest rates during the post-meeting press conference.
I think the next policy rate change is unlikely to be an increase unless there is enough evidence to prove that our policy stance is not sufficiently restrictive. However, this is not the situation we see at present.
Following this statement, the stock market temporarily surged. Bitcoin also briefly rose from 57K to 59K, but then retreated to its original level.
In addition, Powell emphasized the independence of the Federal Reserve, stating that politics and the upcoming U.S. presidential election are “not part of the considerations of the Federal Reserve.”
FOMC
Federal Reserve
Powell
Further Reading:
Rise in U.S. Unemployment Rate Could Lead to Rate Cut by Year-End? Bitcoin Surpasses 63K
A Comprehensive Look at Tonight’s Expected FOMC Results, with Almost Zero Possibility of Rate Adjustment