The Fed issues the interest rate decision and the most important points of Powell’s statements

Wednesday, May 01, 2024 - 19:16
Point Trader Group

• The labor market is still relatively tight.

• We are very concerned with inflation risks.

• Inflation has fallen significantly over the past year but remains very high.

• Inflation remains very high and further progress is not guaranteed.

• The economy has made significant progress toward achieving the dual goals.

• Nominal wage growth has declined over the past year, but labor demand still exceeds supply.

• Inflation data received this year was higher than expected.

• Despite this, long-term inflation expectations remain well established.

• Gaining more trust will likely take longer than previously expected.

• So far this year, inflation readings have not given us greater confidence.

• If inflation continues on its current path, it would be appropriate for the US Federal Reserve not to cut rates.

• The upcoming economic data will determine the peak of the US interest rate.

Our current discussion is no longer about whether we will raise interest rates. Our discussion now is when we will reduce interest rates, and this will be based on inflation and labor data.

 The current monetary policy is tight and allows inflation to return towards its set target.

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