The interest rate guessing game is not over.
In a speech on Thursday at "Monetary Policy Challenges in a Global Economy" panel, hosted by the IMF, US Federal Reserve Chair Jerome Powell poured cold water on the surging notion of a peaked rate, emphasizing that the US central bank will continue to move carefully but stated, “If it becomes appropriate to tighten policy further, we will not hesitate to do so.”
Powell also confessed, “We know that ongoing progress towards our 2 percent goal is not assured. We are not confident that we have achieved such a stance.”
In other words, the US central bank would rather keep its door open in case the upside surprise of inflation returns, given that “Inflation has given us a few head fakes,” in Powell’s words.
Following these remarks, the market quickly moved to price in a higher chance for another hike before January 2024 and also postponed the timeline of the Fed’s first rate cut to the second half of 2024.
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2023-11-10 12:23:49Z
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