Türkçe
Español
Federal Reserve Chairman Jerome Powell, in his remarks following the last FOMC meeting, confirmed that interest rates remain steady at 4.5%. He evaluated current policies in line with the existing economic outlook, emphasizing that inflation indicators will be closely monitored to ensure economic stability.
Quantitative Easing and Inflation Insights
Powell articulated that inflation is transitory, suggesting that the current measures could suffice during this period. He also addressed measures to prevent price increases between the U.S. and Canada, assuring that flexibility in monetary policy will continue.
In part of his speech, Powell announced a reduction in the pace of the securities portfolio decrease, specifying that the monthly limit for the repayment of Treasury bonds would be lowered from $25 billion to $5 billion.
Jerome Powell: “The committee will slow the pace of the securities portfolio reduction by decreasing the monthly repayment limit on Treasury bonds.”
Powell highlighted that tariffs implemented during Donald Trump’s administration have influenced inflation. However, he noted that this situation has not adversely affected all economic activities, particularly indicating that the service sector has suffered less. Additionally, he remarked that the long-term effects of trade tensions have yet to surface.
Market Reactions to Powell’s Remarks
The decision to maintain interest rates contributes to short-term price stability, while Powell’s comments have alleviated some uncertainties in the markets. The good news is that asset reduction will not stop until the end of the year, though there was a significant step back today. After the market priced in excessive negativity, this buyback is quite positive.
As April 2 approaches, it is crucial to see statements about ongoing negotiations with trading partners. After navigating the next two weeks, a potential decrease in U.S. employment figures could further bolster risk appetite as market uncertainties ease.
Assessments indicate that Powell’s speech and announced monetary policy steps are urging caution among stakeholders despite economic uncertainties. The outlined measures will be implemented gradually based on economic data.
