Powell
- Some of the worst economic fallout from the pandemic have been avoided
through "swift and forceful actions," Federal Reserve Chair Jerome Powell
said during his post-FOMC decision press conference.
- He described both the fiscal support provided by Congress in three
relief packages as well as the Fed using its full set of tools to keep
credit flowing.
- The Federal Open Market Committee is "very determined to implement its
guidance in a robust way," and adds that they're committed to its new
policy framework it introduced last summer, Powell said.
- He clearly is pushing back on market expectations that the central
bank will raise interest rates before the end of 2023. The 10-year
Treasury
yield sits at ~1.65%, below the session's high of 1.68%.
- *3:30 PM ET:* Press conference ends.
- *3:10 PM ET:* The Fed's "dot plot" in its summary of economic
projections is not a committee forecast, the Fed chair emphasized. "It's
not a promise or prediction on when the committee will act."
- *3:05 PM ET:* The central bank is a couple weeks away from announcing
its decision on whether to continue its restrictions on bank dividends
and
stock repurchases, Powell said.
- *2:55 PM ET*: "We think our stance on monetary policy remains
appropriate," he said in response to a question on the recent increase in
bond yields. He also repeated that the Fed will be "patient."
- Asset purchases across the curve are currently appropriate, he added.
He would be concerned by "disorderly market conditions."
- *2:51 PM ET*: That means the Fed won't raise interest rates until it
is has met its goals of full employment (using a wide range of
indicators),
that inflation has reached 2%, and that it's on track to run moderately
above 2% for some time.
- *2:43 PM ET*: The Fed will announce something on the supplementary
leverage ratio rule for banks "in coming days," so he refused to comment
on
that issue now. (Here's more on the SLR rule.)
- *2:42 PM ET*: It's "not yet" time to "talk about talk about" tapering
bond purchases, Powell said, reinforcing that the Fed will have to see
"actual progress" towards its goals, not forecast progress.
- Emphasizes that the bulk of the committee doesn't expect rate
increases through 2023.
- *2:38 PM ET*: "Vaccinations offer hope for return to more normal," he
said. And while the economy is recovery, it's still a long way from the
Fed's goals.
- In commenting on inflation, "One-time increases in prices are likely
to have only transitory effect on inflation," Powell said.
- Notes the importance of keeping inflation expectations anchored at 2%.
- Reaffirms that the Fed will use all of its tools for as long as
they're needed to support the economy.
|Yesterday, 2:34 PM|19 Comments
Comments
Post a Comment