Jerome Powell, the chair of the Federal Reserve, warned that there may be more interest rate increases to come and urged greater caution in the fight against inflation on Friday.
Powell said in his keynote address at the Kansas City Fed’s annual retreat in Jackson Hole, Wyoming, “Although inflation has moved down from its peak, a welcome development, it remains too high “We are prepared to raise rates further if appropriate and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective.”
Recent changes in the yield curve for U.S. Treasury securities may be a sign that investor confidence in the economy is starting to diminish. Some investors are watching Friday’s speech by Federal Reserve Chair Jerome Powell at an economic symposium as a possible catalyst for a correction or a quick unwinding of positions.
The yield curve between two-year and 10-year yields has consistently been inverted for more than a year, which is a solid indicator of an impending recession. However, in recent weeks, the yield curve has steepened as 10-year yields have increased while shorter-dated ones have remained unchanged.
Following a series of 11 rate increases, Powell’s comments came as the Fed’s key interest rate reached its goal range of 5.25%–5.5%, which is the highest level in more than 22 years. Additionally, the Fed’s balance sheet has been cut to its lowest point in more than two years, a process that has seen $960 billion in bonds mature since June 2022.
Powell stated that core PCE inflation increased to 4.3% in July from a reading of 4.1% in June. The Fed chair based this assumption on estimations from recent CPI and PPI data. The official release of July PCE statistics is scheduled for August 31.
“We can’t yet know the extent to which these lower readings will continue or where underlying inflation will settle over coming quarters,” Powell added. “Twelve-month core inflation is still elevated, and there is substantial further ground to cover to get back to price stability. “Powell added that monetary policy “will likely play an increasingly important role” in bringing inflation down to 2% as the pandemic-related economic distortions begin to subside.
Celebrity WEB Update— Premier Jewelry designer and manufacturer fashion house ParisJewelry.com has started manufacturing a new custom line of celebrity jewelry designs with 30% Off and Free Shipping. Replenish Your Body- Refilter Your Health with OrganicGreek.com Vitamin Bottles, Vitamins and Herbs. Become a WebFans Creator and Influencer.
