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Powell: Fed to Act "Strongly" to Bring Down Inflation

Published 09/08/2022, 09:47 AM
Updated 09/08/2022, 09:49 AM
© Reuters.

© Reuters.

By Scott Kanowsky

Investing.com -- Federal Reserve chair Jerome Powell vowed to press on with the U.S. central bank's fight to cool down red-hot inflation, possibly laying the rhetorical groundwork for another large interest rate rise later this month.

In a closely-watched speech at the Cato Institute's annual monetary conference, Powell said the Fed would act "forthrightly, strongly" in its bid to bring down consumer prices.

"The longer inflation remains above [the Fed's 2%] target, the greater the risk that the public does begin to see higher inflation as the norm, and that has the capacity to really raise the cost of getting inflation down," Powell said. "History strongly cautions against prematurely loosening policy."

Powell added that the Fed would "keep at until the job is done," reiterating a pledge he made in Jackson Hole, Wyoming last month.

His comments come after Fed vice chair Lael Brainard said on Wednesday that the central bank was dedicated to battling inflation "for as long as it takes."

The Fed has already raised borrowing costs by 225 basis points since March. But persistently high inflation, as well as continued job market tightness and the subsequent support it brings to demand, may serve to bolster policymakers' case for keeping rates higher for longer.

The central bank's next scheduled meeting is September 20-21, with more than 80% of traders expecting it to increase rates by 75 basis points for a third time this year, according to the CME's FedWatch tool.

The U.S. 2-Year Treasury Yield, which is highly sensitive to short-term interest rate changes, rose to as high as 3.49% as Powell delivered his remarks, while stock indices on Wall Street traded in the red.

Latest comments

I don’t think buyers understand “Strongly” means We’re Not Priced in! Market continues fighting the Fed… plus, his keep mentioning Former Chair Paul Volcker, he wreck the stock market by packaging big fat Recession because Markets were pushing back on Fed. Imo
Just raise to 5% now and over with keep threatening keep raising interest.
Talk is cheap.  Fed as a lot of room to raise while America pays the price for their lateness and lack of diligence.
Powell will *******every aspect of growth
Fed go to hell
CPI numbers will be very low, Powell tried to dump the market
You could be on target my friend.  Rather scary and uncertain and disordered times we live in.  Can't trust CPI.  1. Home school  2. Grow gardens.
Eth: i dont care ur inflation / hawkish, i merge now, cant stop me pump
buden is the cause, Powell is another liar.
Putin  is a major cause of inflation
""...Powell said the Fed would act 'forthrightly, strongly'..." Now THAT'S how you bring down inflation: with a THESAURUS !!
"forthrightly" &  "strongly" are not synonyms, nor antonyms.
Powel sell gold on high and just close his transaction after he spoke to the public.... so the winner is always him....
The markets are laughing at this guy!!
A strong dollar helps hold down domestic inflation, by lowering the cost of imported goods. Every dollar buys more goods and services as it rises. Since the U.S. is a large net importer, a 14% rise in the dollar can have a measurable impact on inflation.Aug 4, 2022
A strong dollar is a double edged sword. we are net importers of goods but net exporter of services. A rise in the dollar favors imports but hinders exports which directly affect GDP and recessionary effects.
He waited until the wealthy got wealthier, made enough $, now we start caring and increase rates
This should of happened about 2 yrs ago
Dude. The fed has been Raising Rates for Months now. Its time for you to do some Research.
Seems as if the Fed is at war with the EU. EU raises rates and the Fed counters with even greater threats. Strengthens the US Dollar even more against the Euro. Speaking on the same day the EU raised rates this morning.
And if strong words and speeches don't do the trick, Powell will use REALLY strong words and speeches!
Should have cashed out months ago, folks.
I'm better than him!
There's not lowering rates but there is also a puase at some point. They are not going to raise rates every meeting until inflation is at 2% so stop deflecting
Dude will go down in history as making a bonfire out of people`s pension funds in particular and the American economy in general.
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