Welcome to Extreme Investor Network, where we strive to provide you with the most up-to-date and valuable information in the world of finance. Today, we bring you breaking news from the Federal Reserve Chair Jerome Powell regarding the state of the U.S. economy and inflation.
In a recent policy forum focused on U.S.-Canada economic relations, Powell discussed the current state of the U.S. economy, noting that while there has been solid growth and continued strength in the labor market, inflation has not returned to the central bank’s 2% target. This suggests that interest rate cuts are unlikely to happen in the near future.
Since July 2023, the Fed has maintained its benchmark interest rate in a target range between 5.25% and 5.5%, the highest in 23 years. Powell emphasized that the current level of policy is likely to remain in place until inflation shows more progress towards the Fed’s target.
The latest inflation data for the first three months of 2023 has been higher than expected, with a consumer price index reading for March showing inflation running at a 3.5% annual rate. While this is lower than the peak in mid-2022, it has been drifting higher since October 2023.
Powell’s comments led to a rise in Treasury yields, with the benchmark two-year note briefly exceeding 5% and the 10-year yield also increasing. Major stock indexes initially rose but later fell after Powell’s remarks.
The Fed’s preferred inflation gauge, the personal consumption expenditures price index, indicated core inflation at 2.8% in February and has remained relatively stable over the past few months. Powell reiterated that the Fed will need greater confidence that inflation is moving sustainably towards 2% before considering easing policy.
As we continue to monitor the evolving economic landscape, be sure to stay tuned for updates here on Extreme Investor Network. Our team is dedicated to providing you with insightful analysis and expert commentary to help guide your financial decisions in today’s complex market environment.
