(Finance) – “We must not be in a hurry to change our monetary policy position And we are well positioned to wait a greater clarity. ” Jerome Powellin the press conference that followed the decision to leave the rates unchanged on the interval 4.25-4.50% and to slow down the rhythm of the quantitative tightening starting from April.
“The participants (at the FOMC, editor’s note) expressed their individual assessments of an appropriate path for the rate based on what each participant believes to be the most probable scenario for the future – he told – and, I admit, is a demanding exercise right now. In light of a remarkable uncertainty, the median participant provides that the appropriate level of the rate will be 3.9 percent at the end of this year and 3.4 percent at the end of next year, unchanged compared to December. While these individual forecasts are always subject to uncertainty, The uncertainty today is unusually high“.
“And of course, these projections are not planned by the Committee – he added – Politics is not on a preset path. As the economy evolves, we will change our political position in a way that best promotes our maximum employment and price stability objectives. If the economy remains strong and inflation does not continue to move in a sustainable way to two percent, we can maintain political moderation longer. There our current policy is well positioned to face risks and uncertainties that we face in pursuing both sides of our double mandate “.
Powell also spoke of the changes in the quantitative tightening: “In today’s meeting, we also decided to slow down the rhythm of the decline of our budget. Since we started the runoff of the budget, the portfolio titles have decreased by over 2 trillion dollars. The market indicators continue to suggest that the amount of reserves remains abundant, but but We have seen some signals of greater rigidity in money markets. Starting from April, the monthly limit on the reimbursement of treasure titles will be lowered from 25 billion to 5 billion. We are leaving the limit on agency titles unchanged. This action has no implications for our expected monetary policy position And it should not influence the size of our budget in the medium term “.
Looking forward, “La new administration It is about to implement significant political changes in four distinct areas: trade, immigration, tax policy and deregulation. It is thenet effect of these policies which will have importance for the economy and for the path of monetary policy “.
To a question if the revision of the inflation forecasts is due to the duties, he replied that it is difficult to analyze how much of the inflation is guided by the duties, but “Clearly a part, a good part, derives from the duties“Although the basic case is that the duties will not lead to a sustained acceleration of inflation, Powell says that” we cannot really know. We will have to see how the things “https://www.Finance.it/detaglionews/223_2025-03-19_TLB/ will actually go.” We think the inflation has started to rise now, partly in response to the duties e There may be a delay in further progress during this year“, he said in another step.
“The Fed does not make forecast on the probability of recession, but if you look at external forecasts, the Forecaster generally increased the possibility of recession in a certain sense, but still at relatively moderate levels, in the historical average, also because they were extremely low only two months ago – said Powell – it was said that The probability of a recession was extremely low, so now it has increased, but it is not high“.