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In just a few sentences, the head of the US Federal Reserve forced dealers to buy. Investors have interpreted Jerome Powell's statements as indicating a more cautious approach by central bankers to future rate hikes. The Dax then launched Thursday significantly more. In US markets, prices rose sharply on Wednesday after Powell's statements.
"We know that the economic impact of our interest 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.
"Traders see this as a sign that the Fed will apply a less aggressive rate hike policy," said badyst David Madden of online broker CMC Markets, in light of Powell's recent comments.
Trump: "I do business and I do not get support from the Fed"
The spicy: Earlier, US President Donald Trump Powell said it was unfortunate that interest rates are rising in the US economy. "I do business and I do not get support from the Fed," said the Washington Post president.
The central bank is independent and therefore not subordinate to the government. With the boom of the economy, the Fed has gradually increased interest rates since early 2017 to keep inflation at a moderate level. It wants to fulfill its mandate to promote full employment and stable prices.
On Wednesday, Powell said he's still waiting for "solid" growth in the economy. 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%.
Other signs of US monetary policy, the stockbrokers hoped the publication of the minutes of the recent meeting of the Fed Thursday night.
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