Powell's two words "just below"

The two words "just below" on Friday, US Federal Reserve Chairman Jerome Powell, raised the New York Stock Exchange by more than 2%.

"The benchmark interest rate is still low," said Powell in his speech at the New York Economic Club, "We are in a broad range just below, estimated to be neutral, with no overheating or slowdown. l & # 39; economy. " . At the Atlantic festival organized by the Think Tank Aspen Institute on the 3rd of this month, he shocked the market by stating that "(the interest rate) seems to be far from being neutral at the moment".

President Donald Trump has criticized the Fed for several quick rises. "I'm not at all happy since I picked Jay (Jerome Powell)," Trump said in an interview with the Washington Post on the 27th. "The Fed is totally wrong about what it's doing. , Criticized.

Earlier this month, Wall Street rallied, hoping that rate hikes could be stopped or slowed after Powell's announcement "a little less". The Dow Jones Industrial Average rose 617.70 points, or 2.50%, to close at 25,366.43. The Standard & Poor's 500 Index and the Nasdaq Composite Index gained 2.30% and 2.95%, respectively.

At the September meeting, the 15 members of the board of directors presented a neutral interest rate of 2.5 to 3.5% per annum. Neutral interest rates represent the ideal level of rates that can achieve potential growth without inflation or deflationary pressures. Currently, the key rate is 2.00 to 2.25% per annum, which is close to the neutral interest rate limit. As the market expects, the Fed will lower the neutral rate to 2.25% to 2.50% by raising the interest rate next month. If you raise again four times next year, you will reach the upper limit of the neutral rate. Powell has not indicated how to raise interest rates more than neutral rates over the coming month.

Powell said: "The prospects of participants in the Federal Open Market Committee (FOMC) are based on the badessment of the" best economy ", but there is no pre-established political path." It is necessary to react preventively to overheating of the economy because of the time needed for the interest rate to influence. Powell cautioned against the risk of increasing corporate debt that day. "Borrowers have struggled in times of economic downturn and investors may suffer more than expected," he said. "I was worried.