(Finance) – “When policymakers gathered in Wyoming for the Jackson Hole Economic Symposium two years ago, they were rapidly raising interest rates to control inflation. Last year, they were hesitant to believe they had reached the top. This year, Fed Chairman Jerome Powell has been clear: “It’s time to adjust monetary policy,” and the Fed is preparing to go down. He comments Richard Flax, Chief Investment Officer at Moneyfarmfollowing today’s speech by the head of the US central bank.
“However, questions remain about the speed of the descent. – the expert points out – Inflation is gradually approaching the 2% target and the labor market is weakening even if the economy still seems to be in good condition. It is unclear whether this scenario will justify the 50 basis point cut. next month that financial markets are currently expecting. After being clear about the timing and direction, Chairman Powell gave little indication of the pace of the decline, noting that it would depend on “incoming data, evolving forecasts and the balance of risks.”
“But investors rarely get everything they want from central bankers,” he added. “This year at Jackson Hole, Chairman Powell highlighted that the Fed’s focus has shifted in part from keeping inflation in check to the labor market, and that monetary policy should respond quickly. A statement that we believe to be of a reassuring level of clarity“.