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Federal Reserve Chairman Jerome Powell is scheduled to speak this Wednesday, April 3rd. Just days after hinting that a rate cut may not happen this year, Powell will be back at the podium ahead of Friday’s important March jobs report.
What should we expect this time?
Well, if history is any indication, it’s probably the same thing. Indeed, Chairman Powell has generally been fairly neutral this year, maintaining his expectation that rates will be cut but acknowledging that economic conditions justify keeping rates high for an extended period of time.
Chairman Powell last week affirmed expectations that the central bank would cut interest rates, but pushed back on the idea that the Fed is complacent with inflation.
“No, that’s not what I meant,” Powell said. “We have revised our growth forecasts upward, as have many other forecasters, saying that the economy is doing well and that inflation data has been released a little higher as a separate matter, leading to upward revisions to people’s inflation expectations. I think it was.” [projections]”
Consumer prices rose 2.5% in February, according to the Federal Reserve’s Personal Consumption Expenditures (PCE) report released last week. This is slightly higher than January’s inflation rate of 2.4% and suggests the final stages of the fight against inflation may be more difficult than investors expected.
Jerome Powell may be weighed down by falling stock prices
So far, stock market reaction to Chairman Powell’s comments last week has been muted. In fact, most of the major indexes fell during the first two trading sessions of the new week, the first day of the second quarter.
of S&P500 and Nasdaq Composite They have fallen 1% and 1.3%, respectively, so far this week. Depending on the tone that Chairman Jerome Powell adopts tomorrow, it could help slow the losses or cause continued bearish sentiment.
“We are strongly committed to bringing inflation down to 2% over the long term,” Powell added. “The market believes we can achieve that goal, and over time we will, so we should believe so.”
On the date of publication, Shree Dua did not have (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer and are subject to InvestorPlace.com Publishing Guidelines..
