(Finance) – The President of the Fed Jerome Powell it might surprise you markets again and not to mention no turnaround in US monetary policy once interest rates have reached the desired level, compatibly with inflation.
Observers expect the number one of the US central bank, who will speak today at 4 pm Italian time at the symposium in Jackson Hole, Wyoming, to mention the possibility of a rate cut shortly thereafter that these will have reached theirs maximum point. But according to experts it won’t be like that and Powell will indeed use a tone even more severe than usual.
The President may point out that the US central bank it will use all the firepower to stifle inflation and claim that once it has finished raising rates, it will keep them at that level for a period of time, contrary to market expectations that were expecting a cut as early as next year.
Powell it will not mention the extent of the next rate hike when the FOMC meets on September 21, – 50 or 75 points – but will say that the decisions they are strictly linked to economic data to be released before the meeting (one more report on their market and one on consumer prices on 13 September). For now, the Future market is pricing in an increase in the cost of money of 0.75% for September as in the two previous rounds.
In any case Powell will try not to seem too accommodating (dovish) as happened in July, when his words were misinterpreted, resulting in an unwanted rally in equity markets and a fall in bond yields.
Meanwhile, yesterday evening, the President of the Kansas City Fed, Esther Georgeas a host of the Central Banks Symposium, informally opened the event with the traditional series of interviews with US newspapers, stating that the Fed has room for further interest rate hikesbecause inflation is still high.
“We still have high inflation. We saw some slowdown in the numbers in July, but I think there is more work to be done, “reiterated George, admitting that the July data may not represent a turnaround in inflation that, to see a” convincing “trend. , you should have at least three consecutive months of good data.