BREAKING NEWS
Powell at Jackson Hole: ‘The Time Has Come’ for the Fed to Soon Begin Reducing Interest Rates
August 22, 2023, Jackson Hole, WY – Federal Reserve Chairman Jerome Powell declared today that the time has come for the US central bank to consider reducing interest rates, sending shockwaves through the global financial markets.
Speaking at the annual Economic Policy Symposium in Jackson Hole, Powell emphasized that the economy is strong and employment is near historic lows, citing the Fed’s dual mandate of price stability and maximum employment. However, he noted that the rate-cutting decision is not solely dependent on economic data, but also on inflation expectations.
"It’s not a question of ‘if’ we cut rates, but ‘when’ and ‘by how much’," Powell said, underscoring the need for a tailored approach to monetary policy.
The chairman’s comments were met with cheers from investors and a surge in market activity, as the Dow Jones Industrial Average shot up over 150 points and bond yields dropped sharply.
Powell’s remarks came as a surprise to many, given the Fed’s previously hawkish stance on interest rates. Analysts now expect the central bank to cut rates as early as September or October, a move that could potentially stimulate economic growth.
KEY QUOTES
- "The time has come" for the Fed to consider reducing interest rates.
- "It’s not a question of ‘if’ we cut rates, but ‘when’ and ‘by how much’".
- "The economy is strong, employment is near historic lows, but inflation expectations are our primary concern".
ANALYST REACTION
"The Fed’s dovish shift is a welcome relief for the markets," said David Carter, a senior strategist at Global Investment Analytics. "While the economy remains strong, Powell’s comments suggest a more nuanced approach to monetary policy, recognizing the potential benefits of rate cuts."
INDEX PERFORMANCE
- Dow Jones Industrial Average: +1.54%
- S&P 500: +1.21%
- Nasdaq Composite: +1.58%
- 10-Year Treasury Bond Yield: -10.6 basis points
RELATED TAGS
- Jerome Powell
- Federal Reserve
- Jackson Hole Symposium
- Interest Rate Cut
- Economic Policy
- Monetary Policy
- Inflation Expectations
- US Economy
- Stock Market
- Bond Market
- Central Banking
- Economic Growth
- GDP
- Fiscal Policy
- Recession Fears
- Business News
- Financial News
- Economic Outlook
- Federal Reserve Policy
[Business] – Powell at Jackson Hole: ‘The time has come’ for the Fed to soon begin reducing interest rates
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