Powell

US Federal Reserve chairman Jerome Powell made it clear that Fed policy and the benchmark borrowing rate would have to remain "sufficiently restrictive".

“But a failure to restore price stability would mean far greater pain.” [avoid a delisting in New York.](https://www.straitstimes.com/business/companies-markets/chinas-alibaba-will-strive-to-keep-us-listing-amid-audit-dispute) [Modest signs of slowing in the world’s largest economy](https://www.straitstimes.com/business/companies-markets/us-inflation-runs-cooler-than-forecast-easing-pressure-on-fed) and easing price pressures had spurred hope in financial markets that the central bank might ease up on its aggressive interest rate hikes, and perhaps even start to reverse course next year. Sentiment had been boosted ahead of Powell’s speech by the latest readings of the US personal consumption expenditures price index, the Fed’s preferred yardstick for inflation, which dipped 0.1 per cent from in July from June, and slowed to 6.3 per cent from 6.8 per cent on an annual basis. [been on an aggressive campaign](https://www.straitstimes.com/business/economy/more-us-rate-hikes-coming-says-fed-but-at-some-point-pace-will-slow) to raise interest rates – and Powell made it clear at the Jackson Hole gathering of global monetary policymakers that the fight against inflation is not over. [pledged to act “forcefully” against soaring inflation](https://www.straitstimes.com/business/economy/feds-powell-pain-of-tight-policy-slow-growth-needed-for-some-time-to-beat-inflation) in a battle that will be painful for American families and businesses.

Federal Reserve Chairman Jerome Powell speaks during a news conference. Fed Chair Jerome Powell has said the Fed can still tame inflation without causing ...

He also said there would “very likely” be some pain in the job market, which could mean a jump in the unemployment rate — that is, millions of job losses. “It is true that the current high inflation is a global phenomenon, and that many economies around the world face inflation as high or higher than seen here in the United States,” Powell said. The Fed’s campaign to curb the highest inflation in four decades runs the risk of triggering a recession in the world’s largest economy. “These are the unfortunate costs of reducing inflation. Indeed, Powell’s words were a stark about-face from his remarks at the same conference last year, when he said elevated inflation was likely to prove temporary. “We must keep at it until the job is done,” he said.

Gold fell over 1% on Friday after Federal Reserve Chair Jerome Powell in his speech at Jackson Hole said the U.S. economy needed a tight monetary policy ...

gold futures settled 1.2% lower at $1,749.8. Spot gold fell 1.2% to $1,738.14 per ounce by 1335 p.m. Register now for FREE unlimited access to Reuters.com ET, en route to fall for a second straight week, down about 0.4% so far.

The major averages declined for a second week. The Dow tumbled 4.2%. The S&P 500 and Nasdaq Composite lost roughly 4% and 4.4%, respectively. Powell reiterated ...

"We think the June lows are probably in but the caveat there is that it's not going to be smooth sailing. However, the market is still in for more turbulence, he says. Federal Reserve](https://www.cnbc.com/federal-reserve/) Chairman Jerome Powell's speech at the Jackson Hole economic symposium. "Right now, the market is pricing 3.62% for the end of this year, and the peak to be about 3.78% in March," said Schumacher. A sharp sell-off in chip stocks in this year has offered investors an opportunity to buy the dip. It was expected that the PCE index would be unchanged on a monthly basis in July and up 6.4% on the year. It's one of the reports the Fed will be watching ahead of its September meeting, when it is likely to raise interest rates again. "But the potential for a hard recession (our macro colleagues expect S&P EPS to fall in 2023 and question the excitement around 8.5% inflation) may result in another risk asset correction including crypto/digital assets." The fed funds futures market is pricing in some significant hikes, including the 64 basis points of a hike in September, notes Schumacher. The [2-year yield,](https://www.cnbc.com/quotes/US2Y) which is most driven by Fed policy, was slightly lower at 2.38%. That was up from 51.5 in July and above the 55.3 expected by economists, according to Dow Jones. [Affirm](//www.cnbc.com/quotes/AFRM)— Shares plunged more than 20% after the consumer lending company reported a larger-than-expected quarterly loss, and issued a disappointing outlook.

Chair Jerome H. Powell. At “Reassessing Constraints on the Economy and Policy,” an economic policy symposium sponsored by the Federal Reserve Bank of Kansas ...

A lengthy period of very restrictive monetary policy was ultimately needed to stem the high inflation and start the process of getting inflation down to the low and stable levels that were the norm until the spring of last year. It is also true, in my view, that the current high inflation in the United States is the product of strong demand and constrained supply, and that the Fed's tools work principally on aggregate demand. The more inflation rose, the more people came to expect it to remain high, and they built that belief into wage and pricing decisions. As former Chairman Paul Volcker put it at the height of the Great Inflation in 1979, "Inflation feeds in part on itself, so part of the job of returning to a more stable and more productive economy must be to break the grip of inflationary expectations." That is broadly true of surveys of households, businesses, and forecasters, and of market-based measures as well. It is true that the current high inflation is a global phenomenon, and that many economies around the world face inflation as high or higher than seen here in the United States. Our decision at the September meeting will depend on the totality of the incoming data and the evolving outlook. At some point, as the stance of monetary policy tightens further, it likely will become appropriate to slow the pace of increases. We are moving our policy stance purposefully to a level that will be sufficiently restrictive to return inflation to 2 percent. While the lower inflation readings for July are welcome, a single month's improvement falls far short of what the Committee will need to see before we are confident that inflation is moving down. The labor market is particularly strong, but it is clearly out of balance, with demand for workers substantially exceeding the supply of available workers. At past Jackson Hole conferences, I have discussed broad topics such as the ever-changing structure of the economy and the challenges of conducting monetary policy under high uncertainty.

Federal Reserve Chair Jerome Powell delivered a stark warning Friday about the Fed's determination to fight inflation with more sharp interest rate hikes: ...

The central bank has lifted its benchmark rate by 2 full percentage points in just four meetings, to a range of 2.25% to 2.5%. What particularly worries Powell and other Fed officials is the prospect that inflation would become entrenched, leading consumers and businesses to change their behavior in ways that would perpetuate higher prices. Though prices did jump 6.3% in July from 12 months earlier, that was down from a 6.8% year-over-year jump in June, which had been the highest since 1982. Investors had been hoping for a signal from Powell that the Fed might moderate its rate increases later this year if inflation were to show further signs of easing. On Friday, an inflation gauge that is closely monitored by the Fed showed that prices actually declined 0.1% from June to July. An increase of either size, though, would exceed the Fed's traditional quarter-point hike, a reflection of how severe inflation has become.

Over the years, the annual central bank confab at Jackson Hole has seen Federal Reserve chairs address immediate policy issues as well as longer-term and more ...

[Purchase a Print subscription for 11,12 € per week You will be billed 107,91 € per month after the trial ends](https://subs.ft.com/spa3_uk3m?segmentId=461cfe95-f454-6e0b-9f7b-0800950bef25&utm_us=JJIBAX&utm_eu=WWIBEAX&utm_ca=JJIBAZ&utm_as=FIBAZ&ft-content-uuid=c2e48e57-1989-4c48-b163-db19c3a203b1) [Purchase a Digital subscription for 6,64 € per week You will be billed 39 € per month after the trial ends](https://subs.ft.com/spa3_digital?ft-content-uuid=c2e48e57-1989-4c48-b163-db19c3a203b1) [Purchase a Trial subscription for 1 € for 4 weeks You will be billed 65 € per month after the trial ends](/signup?offerId=41218b9e-c8ae-c934-43ad-71b13fcb4465&ft-content-uuid=c2e48e57-1989-4c48-b163-db19c3a203b1)

In a forceful speech in Jackson Hole, Wyo., the Federal Reserve chair said central bank officials know inflation is still too high.

“He has wanted to tell a somewhat hopeful story: ‘This is something we can accomplish,’” said Tim Duy, a Fed expert at the University of Oregon and chief economist at SGH Macro Advisors. After misjudging inflation last year, the central bank is now in a race to rein in inflation that has risen higher and spread further throughout the economy. But Republicans continue to hammer Democrats for hefty stimulus packages earlier in the pandemic, and argue that any more federal spending or [cancellation of student loan debt](https://www.washingtonpost.com/education/2022/08/24/biden-student-loan-cancellation/?itid=ap_danielledouglas-gabriel&itid=lk_inline_manual_35) will overheat the economy further. He said that “at some point” it would be appropriate to slow the pace of rate hikes, but did not offer a timeline. Part of the problem is that interest rates are a blunt tactic, and they cannot address all the ways people feel inflation in their daily lives. [eased a bit in July](https://www.washingtonpost.com/business/2022/08/10/july-inflation-clip/?itid=lk_inline_manual_27), clocking in at 8.5 percent compared with the past year — [down from the previous month’s high](https://www.washingtonpost.com/business/2022/06/10/inflation-may-cpi-fed-gas-prices/?itid=lk_inline_manual_27) — as dropping gas prices helped lower overall costs. That’s not strictly a problem for the Fed, which is designed to be independent and whose officials serve terms that don’t directly line up with presidential administrations. “The challenge the Fed faces is to hammer demand in line with a more supply constrained world. “We will keep at it until we are confident the job is done.” Many economists and Wall Street analysts say the bank has only slim odds of achieving what’s known as a “soft landing” — especially because the central bank has rarely managed to launch full cycles of rate hikes to combat inflation without causing a recession. But he said officials were unwilling to allow the “far greater pain” that would result from letting inflation continue at record rates. Powell said Friday — even though officials expect wrestling inflation to normal levels will slow the economy enough to cause “some pain” for households and businesses and, probably, weaken the job market.

US stock markets nosedive as Jerome Powell says at top bank summit the 'overarching focus is to bring inflation back down'

But the rate of inflation remains far above the Fed’s target rate of 2%. [18% in 2023](https://www.theguardian.com/business/2022/aug/22/uk-inflation-will-hit-18-per-cent-in-early-2023-says-leading-bank-citi-gas-electricity) and millions of households face an [80% energy bill](https://www.theguardian.com/money/2022/aug/26/what-is-energy-price-cap-explained-mean-uk-cost) rise from 1 October. But Powell emphasized that tackling inflation was now the Fed’s top priority. Powell made clear that the recent good news was unlikely to sway the Fed from its course. “Our responsibility to deliver price stability is unconditional,” said Powell. At last year’s meeting, Powell dismissed rising prices as a “transitory” phase triggered by supply chain problems related to the coronavirus pandemic. “We must keep at it until the job is done,” said Powell. Powell said the Fed would continue to use its tools “forcefully” until prices were under control. “While higher interest rates, slower growth and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses. The But a failure to restore price stability would mean far greater pain,” he said. Speaking at the Kansas City Fed’s annual meeting of the world’s central bankers in Jackson Hole, Wyoming, Powell said the Fed’s “overarching focus right now is to bring inflation back down”.

Two-year Treasury yields. rose as investors digested the remarks, pushed as high as 3.44% while the 2- to 10-year yield curve resumed its flattening.

Fed officials in June projected rates rising to 3.4% by the end of this year, according to their median estimate, and 3.8% by end 2023. Powell told the conference in his address a year ago that price pressures were limited to a relatively narrow group of goods and services. I don’t think that’s out of the question,” she said in a Bloomberg Television interview. “I think we will have to hold -- it could be over 4%. They will update those forecasts in September -- a fact that Powell took the trouble to remind his audience of in his remarks. Looking beyond the current rate-hike cycle, policy makers are trying to assess whether longer-run inflation pressures will remain persistent. Restoring price stability will require a “sustained” period of below-trend growth and a weaker labor market, Powell said. He reiterated that another “unusually large” increase in the benchmark lending rate could be appropriate when officials gather next month, though he stopped short of committing to one. They remained in that vicinity after he spoke, but the amount of reductions in fed rates priced for 2023 briefly retreated. Officials raised rates by 75 basis points at their last two meetings and signaled the same could be on the table again when they gather next month. Prior to Powell’s speech, investors saw the odds of a half-point or another three-quarter point hike at the Fed’s Sept. “The historical record cautions strongly against prematurely loosening policy.”

The Federal Reserve chair pledged to resolutely fight rapid price increases, arguing the bigger mistake would be allowing inflation to become entrenched.

“History shows that the employment costs of bringing down inflation are likely to increase with delay,” Mr. Powell’s remarks is that he and his colleagues are dedicated to wrestling inflation lower, even if that effort is a painful one. [have argued](https://www.warren.senate.gov/newsroom/press-releases/senator-warren-in-wall-street-journal-op-ed-the-feds-aggressive-interest-rate-hikes-risk-triggering-a-recession-calls-on-congress-to-do-its-part-to-fight-inflation) that the Fed’s tools are a painful way to bring down rising costs. He reiterated that the Fed was likely to slow its increases “at some point,” but he also said central bankers had more work to do when it came to constraining the economy and bringing inflation back under control. Powell also used his key speech to lay out a set of reasons that the central bank must remain dedicated to lowering inflation even if its push causes pain in the short term. [to a range](https://www.newyorkfed.org/markets/reference-rates/effr) of 2.25 to 2.5 percent, and investors have been waiting for any hint at how fast and far the Fed will raise rates in coming months. “It’s really premature to even think that inflation has peaked,” Loretta Mester, president of the Federal Reserve Bank of Cleveland, said during an interview on Yahoo Finance on Friday. Instead, the Fed chair echoed many of his colleagues in arguing that rates will need to go higher, and will need to stay in economy-restricting territory for a while, until inflation is consistently coming down. “The likelihood of recession is rising, because that’s the solution to the inflation problem — that’s what they’re telling you.” While central bankers have spent much of the past year saying they hope to set the economy down gently — and not tip it into recession — Mr. That prominent platform gave him an opportunity to clearly signal the Fed’s commitment to wrestle inflation lower to markets and the public, which he did in his terse and to-the-point eight-minute speech. Powell, the chair of the Federal Reserve, delivered a sobering message on Friday, saying the Fed must continue to raise interest rates — and keep them elevated for a while — to bring the fastest inflation in decades back under control.

In our latest episode of the Bloomberg Opinion podcast, we examine the Fed's glide-path, the evolution of the Ukraine war and Germany's energy conundrum.

The central bank won't be pivoting any time soon, which could be particularly painful for pricey growth stocks.

Yet the market [regained ground](https://www.barrons.com/articles/stock-market-today-51661415105?mod=Searchresults) heading into the meeting on Friday, as investors bought the dip. Then, [Chairman Jerome Powell started talking](https://www.barrons.com/livecoverage/jackson-hole-fed-jerome-powell-speech?mod=article_inline). [The stock market began this past week on its back foot](https://www.barrons.com/articles/stock-market-today-51661160173?mod=Searchresults), an appropriate response as investors appeared to realize that they might have overestimated the chances of a dovish Federal Reserve.

In a blunt 10-minute speech at the annual Jackson Hole Economic Symposium on Friday, Federal Reserve Chair Jerome Powell said he's following through with ...

[don't be afraid to ask tough questions](https://www.forbes.com/sites/jackkelly/2022/06/20/why-you-must-ask-hard-hitting-questions-in-the-job-interview/). [massive loss of around $78 billion](https://www.bloomberg.com/news/articles/2022-08-26/read-fed-chair-jerome-powell-s-speech-at-jackson-hole-symposium) for the fortunes of some of the world's wealthiest people. You can collaborate on a path to reaching your desired role within the firm. At the end of the program, you’ll receive a certificate, badge or accreditation that could help you advance within your organization or when you’re hunting for a new job. If you decide to switch jobs, make sure the new firm is financially strong and doesn’t have plans to lay off employees. [doubled](https://finance.yahoo.com/news/mortgage-rates-nearly-doubling-since-130000514.html#:~:text=The%20average%20rate%20on%20a,%2C%20according%20to%20Realtor.com.) recently. The housing market went from people bidding over the asking price to families [walking away](https://www.benzinga.com/news/22/07/28018387/homebuyers-are-backing-out-of-sales-at-record-levels-report) because they couldn’t afford to pay the higher monthly mortgage rates. The Dow Jones Industrial Average, a bellwether index for the stock market, plummeted more than 1,000 points on the news. During the pandemic, Powell and the federal government flooded the economy with trillions of dollars to provide much-needed funds to families and businesses. One of the intended results is that businesses will enact The Fed and government’s massive spending programs led to record levels of runaway inflation, creating another In a more fiscally restrictive environment, businesses will feel the pain.

An index of global stock markets fell, while short-term U.S. Treasury yields rose on Friday, after Federal Reserve Chair Jerome Powell said the U.S. economy ...

West Texas Intermediate (WTI) crude CLc1 futures rose 54 cents to settle at $93.06 a barrel. Brent crude LCOc1 futures rose $1.65 to settle at $100.99 a barrel. The closely watched gap between yields on two- and 10-year Treasury notes was at -35 basis points, compared to -31.3 basis points before Powell's speech. [read more](/markets/europe/dollar-holds-firm-powell-speech-day-dawns-2022-08-26/) [read more](/business/energy/oil-prices-edge-up-signs-improving-demand-2022-08-26/) [read more](/business/finance/some-ecb-policymakers-want-75-basis-point-hike-discussed-sept-sources-says-2022-08-26/) [read more](/markets/europe/inflation-angst-grips-german-consumers-blues-ease-france-2022-08-26/) NEW YORK, Aug 26 (Reuters) - An index of global stock markets fell, while short-term U.S. "His comments were hawkish. "It was hawkish as expected. Treasury yields rose on Friday, after Federal Reserve Chair Jerome Powell said the U.S. [read more](/markets/us/feds-powell-pain-tight-policy-slow-growth-needed-for-some-time-beat-inflation-2022-08-26/)