All eyes are on the Fed's keynote speech

19 окт. 2023 г.

Federal Reserve Chairman Jerome Powell is scheduled to deliver a major policy speech on October 19th. The aim is to convince the market that the relevant central banks will continue to keep the inflation regime in check, but perhaps not, and that there will be some "easing" going forward.

The first monetary policy plan was submitted to the New York Economic Club as the U.S. economy faces many pressing issues.

Inflation has improved recently, but U.S. Treasury yields are rising, sending mixed signals about the direction of monetary policy. While most markets expect the Fed to keep interest rates on hold, they still expect Powell to confirm and clarify officials' views on the current situation and long-term trends.
Luke Tilley, chief economist at financial services firm Wilmington Trust, said Chief Executive Officer Powell continues to talk about inflation risks given the strength of the economy and unexpected consumer spending in the third quarter. I predict that.
Essentially, chief economist Tilley expects Powell's message to be divided into three parts. First, the Fed had to raise rates quickly, and they did. Next, the Fed needs to set a maximum interest rate, which is at the heart of the debate. And finally, we need to figure out how long interest rates need to stay at this high level to bring inflation down to our 2% target level.