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Markets and Economy
When doves yell: Fed loudly signals a September rate cut
Minutes from the July FOMC meeting were surprisingly dovish, and Federal Reserve Chair Jay Powell suggested a likely policy shift in comments from Jackson Hole.
This afternoon, I live tweeted my perspectives on the US Federal Reserve (Fed) announcement and press conference. As a refresher, the Fed has kept rates steady for its past three meetings, and today followed that trend.
But while there were no changes to US interest rates today, there were several changes to the language in the Federal Open Market Committee (FOMC) statement. In my view, the Fed announcement is attempting to keep a lid on easing financial conditions while admitting that progress has been made on disinflation.
Here are some highlights from Fed Chair Jay Powell’s Q&A session following his press conference:
Follow me @kristinahooper on X for live tweets from the next Fed meeting in March.
When doves yell: Fed loudly signals a September rate cut
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Past performance does not guarantee future results.
Should this contain any forward-looking statements, understand they are not guarantees of future results. They involve risks, uncertainties, and assumptions. There can be no assurance that actual results will not differ materially from expectations.
Balance sheet run-off refers to the Federal Reserve reducing its balance sheet by electing not to reinvest some or all of the principal repaid when securities mature.
Inflation is the rate at which the general price level for goods and services is increasing.
Disinflation, a slowing in the rate of price inflation, describes instances when the inflation rate has reduced marginally over the short term.
Hawkish is to favor relatively higher interest rates if they are needed to keep inflation in check.
Tightening monetary policy includes actions by a central bank to curb inflation.
Monetary easing refers to the lowering of interest rates and deposit ratios by central banks.
The Federal Open Market Committee (FOMC) is a 12-member committee of the Federal Reserve Board that meets regularly to set monetary policy, including the interest rates that are charged to banks.
The opinions referenced above are those of the author as of Jan. 31, 2024. These comments should not be construed as recommendations, but as an illustration of broader themes. Forward-looking statements are not guarantees of future results. They involve risks, uncertainties and assumptions; there can be no assurance that actual results will not differ materially from expectations.
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