Economic impact: Fed President Powell announces more cautious interest | message

"We know that the economic impact of our rate hikes is uncertain," Powell said Wednesday in New York. It can take up to a year or more for the effects to become visible.

According to Powell, the current policy rate is only slightly below the level that can be considered neutral, which means that economic growth is neither sustained nor increased. Most economists expect the Fed not to raise interest rates beyond neutral levels. Until October 3, Powell had called the key rate still far from being neutral.

Observers estimate that a reduction in interest rates in the coming year, according to the latest statements for possible. Markets remain firm on a rise in key rates in December. Then, the key rate should increase by 0.25 percentage points to reach a range of 2.25 to 2.5%.

Powell continues to view the current economic situation as very favorable. He continues to expect "solid" economic growth. The unemployment rate is expected to remain low and the inflation rate close to two percent. The Fed is aiming for an inflation rate of 2%. During the year, the Fed has already raised its interest rates three times, given the strength of its economy.

The US dollar has come under pressure after the statements. The euro has reached 1.3888 dollar for the dollar. US equity markets benefited and US government bond prices rose.

/ Jsl / she

NEW YORK (dpa AFX)

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