{"id":2073949,"date":"2023-10-20T09:43:04","date_gmt":"2023-10-20T13:43:04","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/fed-chair-powell-hints-no-rate-hike-in-november-leaves-door-open-to-tighter-policy\/"},"modified":"2023-10-20T09:49:48","modified_gmt":"2023-10-20T13:49:48","slug":"fed-chair-powell-hints-no-rate-hike-in-november-leaves-door-open-to-tighter-policy","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/fed-chair-powell-hints-no-rate-hike-in-november-leaves-door-open-to-tighter-policy\/","title":{"rendered":"Fed Chair Powell suggests no rate hike in November, but remains open to stricter policies."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">30<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Ffed-chair-powell-hints-no-rate-hike-in-november-leaves-door-open-to-tighter-policy%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2073949&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><blockquote>\n<p>Federal Reserve Chair Jerome Powell hinted that there will be no rate increase at next month&#8217;s Federal\u200d Open \u200dMarket\u2063 Committee (FOMC) policy meeting, but \u2064left the door \u2064open to further tightening if it\u200d is warranted.<\/p>\n<p>Financial markets paid close attention \u200cto Mr. Powell&#8217;s appearance at the \u2063Economic \u2062Club of New York on \u2062Oct. 19, combing through his remarks to\u2063 determine the trajectory of interest rates.<\/p>\n<p>The head of the Federal Reserve refrained from outlining a specific monetary policy path but hinted that the \u200bcentral bank \u2062is finished raising \u2063interest rates. Still, the Fed chief asserted that the institution\u200b must remain vigilant to \u200daccomplish its\u2064 twin objectives of price stability and\u2062 maximum employment.<\/p>\n<\/blockquote>\n<h2>Related Stories<\/h2>\n<ul>\n<li>\n<h3>How the Federal Reserve&#8217;s $100 \u2062Billion Loss Impacts Taxpayers And \u200cWhat Happens Next<\/h3>\n<p>10\/3\/2023<\/p>\n<\/li>\n<li>\n<h3>Real \u2062Wages Grow\u200d for the 1st Time in Almost 2 Years Amid Easing Inflation<\/h3>\n<p>10\/17\/2023<\/p>\n<\/li>\n<\/ul>\n<p>Price inflation remains high, and below-trend economic growth might be required to achieve the \u200cU.S. central bank&#8217;s \u200b2 percent target,\u200b he stated.<\/p>\n<p>&#8220;Inflation \u200dis still too high,&#8221; \u2062said \u2062Mr. Powell, acknowledging \u2063that it\u200c is unclear as to how long lower inflation \u2062readings will last.<\/p>\n<p>He also warned that the U.S. economy would need\u2064 to post below-trend growth and additional softening of \u2063labor market conditions. However, the Fed\u200d chair argued \u2064that the U.S. economy might\u2062 be more immune\u200b to a climate of <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/janet-yellen-as-congress-for-billions-to-help-other-countries-debt-relief-climate-change-initiatives\/\" title=\"Janet Yellen As Congress For Billions To Help Other Countries\u2019 \u2018Debt Relief,\u2019 \u2018Climate Change\u2019 Initiatives\">higher interest rates<\/a> \u200cthan in the past.<\/p>\n<h2>State of Interest Rates<\/h2>\n<p>&#8220;Does it feel like policy\u2062 is\u200d too \u2063tight right now? I\u200b would have to say no,&#8221; he told Bloomberg&#8217;s\u200c David Westin.<\/p>\n<p>The full effects of rate hikes since March 2022 have \u200byet to be felt, alluding \u2062to the\u2062 concept that monetary \u2063policy functions with lags, which was made famous by eminent\u2064 economist Milton \u200bFriedman. For the past \u206320 months, the central bank has \u2064raised rates by 500 basis \u2062points.<\/p>\n<p>But while there is a risk of the Fed doing too much, Mr. Powell contended that this might be necessary, considering the ongoing risks and uncertainty.<\/p>\n<p>&#8220;Given the uncertainties and risks, and\u200c given how \u2062far we&#8217;ve come, \u200dthe committee is proceeding carefully and will make decisions about the extent of\u200b policy firming, and how long policy will remain restrictive based on\u2063 the \u200ctotality of the incoming data, evolving outlook,&#8221; he said.<\/p>\n<h2>Market Reaction<\/h2>\n<p>His remarks hit \u2062all the right points as \u200dhe signaled \u2062a rate pause next month \u200band \u200calluded to another rate\u2062 increase \u200bshould growth and \u200binflation not moderate, says Scott \u2062Anderson, the chief\u200d U.S. \u2063economist at BMO Capital Markets.<\/p>\n<p>&#8220;The Powell speech, \u2063while keeping his options \u2063open, did\u2062 little to change our \u2062view that the Fed\u200d will pause \u2062their rate hikes again at the upcoming\u200d Oct 31-Nov. 1 FOMC Meeting,&#8221;\u200b Mr. Anderson wrote in a note. &#8220;They still believe\u200d the economy will slow despite a surprisingly strong third quarter. \u200bWith Fed\u2063 policy now firmly in\u200b restrictive territory, a strong case can\u200c be made to take\u2064 a wait-and-see approach, until we get more clarity \u200don \u200bthe economic and inflation outlook.&#8221;<\/p>\n<p>The U.S. stock market teetered between positive and negative territory as\u200d investors attempted to digest Mr. \u200dPowell&#8217;s economic \u200dspeech.<\/p>\n<p>Treasury yields were mixed amid a divergence between short- and long-term\u200b bonds. \u2063The 2-year yield slipped below 5.44 percent. The \u2062benchmark 10-year yield picked\u200d up more than 6 basis points to nearly 4.97 percent. The 30-year bond firmed close to 8 basis \u200cpoints to above 5.07 percent.<\/p>\n<p>Mr.\u200b Powell purported that\u2064 the latest volatility in the U.S. Treasury market was driven by a\u2063 combination of factors, including investors revising their\u2062 opinions about the strength and resilience of \u2064the national economy \u200c&#8221;and thinking even longer-term may require higher rates.&#8221; He added that there could also be &#8220;a\u200b heightened focus\u201d on federal deficits, noting that the current\u200b fiscal path is \u201cunsustainable.\u201d<\/p>\n<p>But he rejected the\u200b notion that the\u200b financial \u200dmarkets are\u200b bracing for higher inflation.<\/p>\n<p>Reiterating what some other Fed \u200cofficials \u200dhave said,\u2063 including Minneapolis Fed President Neel Kashkari, Mr. Powell \u200caverred that rising Treasury yields might\u2063 help some of the Fed\u2019s aims.<\/p>\n<p>&#8220;Financial conditions have tightened significantly \u200din recent months, and longer-term bond\u2064 yields have \u200bbeen an important driving factor in this tightening,&#8221; \u200bhe said.<\/p>\n<h2>Did Too\u2063 Much<\/h2>\n<p>Looking back at the coronavirus pandemic,\u200b Mr. Powell and\u200d his colleagues \u200cassessed the landscape and \u2063saw that the virus resulted in many deaths\u2064 and that a vaccine\u2062 would not be \u200bdeveloped for five years.<\/p>\n<p>&#8220;We pulled out all the stops,&#8221; he said. &#8220;With a benefit of hindsight, could we have done a \u200blittle bit less and had a little\u200d bit of inflation?\u2064 I guess we could.&#8221;<\/p>\n<p>During \u2062the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/oregon-governor-encourages-people-to-call-police-on-neighbors-violating-covid-orders\/\" title=\"Oregon Governor Encourages People To Call Police On Neighbors Violating COVID Orders\">public health crisis<\/a>, the \u200bFed expanded the money supply by 44 percent, \u2064slashed \u2064interest\u200d rates to nearly zero, and unleashed massive monetary stimulus\u2063 and relief measures. By the time the \u200bFed started tightening its belt, the balance sheet soared \u200bto $8.9\u200d trillion, while the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/fed-chair-powell-hints-no-rate-hike-in-november-leaves-door-open-to-tighter-policy\/\" title=\"Fed Chair Powell suggests no rate hike in November, but remains open to stricter policies.\">annual consumer price index climbed<\/a> to\u200c 9.1 percent.<\/p>\n<p> <\/p>\n<h2> Why are some analysts cautious despite \u2064the possibility of\u2063 no rate increase?<\/h2>\n<p><span>  To\u2063 digest\u2062 Mr. Powell&#8217;s comments. Some analysts believe that the possibility of no rate\u200d increase next \u200dmonth could be positive for stocks, as it would \u200dprovide\u2062 some relief to investors who have been \u200bconcerned about <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/china-to-leapfrog-u-s-as-worlds-biggest-economy-by-2028-think-tank\/\" title=\"China to leapfrog U.S. as world\u2019s biggest economy by 2028 \u2013 think tank\">rising interest rates<\/a>. \u2064Others, however, remain \u200dcautious and are waiting for more clarity\u2064 on the economic and inflation outlook before \u200bmaking any significant moves.<\/p>\n<p>In conclusion, Federal Reserve Chair Jerome \u2063Powell&#8217;s recent remarks\u200c at the Economic Club of New York suggest \u2063that there will \u200clikely be no rate increase at the next\u2064 FOMC policy meeting, but the\u200c door \u200bremains open to further\u2063 tightening if necessary. Powell emphasized the importance of price stability and\u200c maximum\u200c employment, and acknowledged that inflation \u200bis still too high. He also mentioned that the U.S. economy \u200bmight be more immune to higher \u200cinterest rates\u2063 than in the\u2062 past. Overall, market reactions to Powell&#8217;s comments have \u200cbeen mixed, with investors attempting \u200dto interpret the implications for stocks and\u2064 waiting for more clarity on the economic and inflation outlook.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Federal Reserve Chair Jerome Powell suggested no rate hike at the upcoming FOMC meeting, but didn&#8217;t rule out future tightening if necessary. The financial markets closely monitored his speech at the Economic Club of New York on Oct. 19.<\/p>\n","protected":false},"author":278,"featured_media":2073950,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[543],"tags":[],"class_list":["post-2073949","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-epoch-times"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2073949","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/278"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2073949"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2073949\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2073950"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2073949"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2073949"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2073949"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}