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FED: Chair Powell Says Fed Policy is Meaningfully Restrictive

FED
USEM BulletFederal ReserveCentral Bank NewsEmerging Market NewsBulletMarketsFixed Income BulletsForeign Exchange BulletsNorth America
  • Powell says longer rates have gone up (despite Fed funds rate cuts) not principally because of expectations about policy or inflation, but due to term premia. Higher rates will probably hold back housing actiivity to some extent if they are persistent.
  • Powell says the Fed doesn't need to be "all the way" at the 2% target before cutting rates. Policy is not highly restrictive, but meaningfully restrictive. I think we need to see further inflation progress.
  • Powell on whether he has asset bubble concerns: From a financial stability perspective, we look at asset prices generally; household and banking sector leverage; funding risk. I'd say asset prices are elevated by many metrics. But there's a lot of resilience in the financial sector.
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  • Powell says longer rates have gone up (despite Fed funds rate cuts) not principally because of expectations about policy or inflation, but due to term premia. Higher rates will probably hold back housing actiivity to some extent if they are persistent.
  • Powell says the Fed doesn't need to be "all the way" at the 2% target before cutting rates. Policy is not highly restrictive, but meaningfully restrictive. I think we need to see further inflation progress.
  • Powell on whether he has asset bubble concerns: From a financial stability perspective, we look at asset prices generally; household and banking sector leverage; funding risk. I'd say asset prices are elevated by many metrics. But there's a lot of resilience in the financial sector.