Is it gonna be empty promises

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AnthonyC
2023-05-21

Is it gonna be empty promises again?

Jerome Powell Keeps June Interest-Rate Pause in Play

WASHINGTON—Federal Reserve Chair Jerome Powell suggested he was open to holding interest rates stead

Jerome Powell Keeps June Interest-Rate Pause in Play

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As policy has become more restrictive, the risks of doing too much versus doing too little are becoming more balanced,” Powell said Friday at a conference hosted by the central bank.</p><p>The Fed has raised its benchmark federal-funds rate rapidly over the past year to fight inflation, most recently this month to a range between 5% and 5.25%, a 16-year high. </p><p>Officials have indicated that their decision on whether to raise rates again at their June 13-14 policy meeting could be a close call. A handful have said inflation and economic activity aren’t slowing enough to justify leaving rates unchanged. But others, including Powell, have hinted that they might skip a rate rise to assess the effects of their past increases and the banking-sector strains. </p><p>Inflation is slowly easing, but it’s still far from the Federal Reserve’s 2% target. WSJ’s Nick Timiraos explains how 2% became the central bank’s sweet spot, and what happens when the U.S. economy strays too far from it. Photo Illustration: Preston Jessee</p><p>Powell spoke on a panel discussion with former Fed Chair Ben Bernanke and frequently read from prepared remarks. While the Fed hasn’t made any decisions about upcoming moves, “given how far we have come, we can look at the data and evolving outlook and make careful assessments,” Powell said.</p><p>Powell addressed the so-called separation principle in which central bankers use emergency lending tools to address financial- and credit-market disruptions so that their monetary policy tools—primarily, interest rates—can stay focused on combating high inflation.</p><p>The Fed quickly implemented a broad lending backstop to ease banking turmoil in March after the collapse of two midsize banks on March 10 and March 12. The Fed raised interest rates at its meetings one week later to combat high inflation. It raised rates again on May 3, days after the failure of a third bank.</p><p>But Powell said there were limits to how much it could divorce monetary policy from financial-market stabilization efforts. “Our tools have separate objectives, but the effects are often not entirely independent,” Powell said. “Because they’re so intertwined, to me, there is not likely to be an absolute and complete separation of the tools–nor is that possible or desirable.”</p><p>Earlier, New York Fed President John Williams presented research at the conference showing the Covid-19 pandemic didn’t change estimates of a “neutral” interest rate that neither stimulates nor restricts demand, a finding with important implications for how high officials may raise rates to slow the economy.</p><p>Between the 2008 financial crisis and the 2020 pandemic, Fed officials and economists had concluded the neutral rate of interest—or the level that balances supply and demand when the economy is operating at full strength—had declined sharply. That, together with weak growth following the crisis, ushered in a period of historically low interest rates.</p><p>Williams said a widely followed model used to estimate the inflation-adjusted neutral rate of interest showed “there is no evidence that the era of very low natural rates of interest has ended.”</p><p>If estimates of the neutral rate of interest shifted higher, officials could conclude that the rates needed to slow inflation would be considerably higher. If those estimates haven’t changed, then the fed-funds rate might be expected to return to less than 3% if the Fed succeeds in bringing inflation down to its 2% target over the next few years. </p><p>Powell said the Fed was committed to bringing inflation down to its 2% goal. “Failure to get inflation down would not only prolong the pain but also increase, ultimately, the social costs of getting back price stability, causing even greater harm for families and businesses,” he said.</p></body></html>","source":"wsj_highlight","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Jerome Powell Keeps June Interest-Rate Pause in Play</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nJerome Powell Keeps June Interest-Rate Pause in Play\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-05-20 07:31 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.wsj.com/articles/a-new-normal-for-rates-not-so-fast-says-new-fed-research-6add6097?mod=hp_lead_pos3><strong>The Wall Street Journal</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>WASHINGTON—Federal Reserve Chair Jerome Powell suggested he was open to holding interest rates steady at the central bank’s meeting next month, saying that the current banking stress could mean rates ...</p>\n\n<a href=\"https://www.wsj.com/articles/a-new-normal-for-rates-not-so-fast-says-new-fed-research-6add6097?mod=hp_lead_pos3\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".IXIC":"NASDAQ Composite",".DJI":"道琼斯",".SPX":"S&P 500 Index"},"source_url":"https://www.wsj.com/articles/a-new-normal-for-rates-not-so-fast-says-new-fed-research-6add6097?mod=hp_lead_pos3","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1169728059","content_text":"WASHINGTON—Federal Reserve Chair Jerome Powell suggested he was open to holding interest rates steady at the central bank’s meeting next month, saying that the current banking stress could mean rates may not need to rise as high as otherwise to slow the economy.“Until very recently, it has been clear that further policy firming would be required. As policy has become more restrictive, the risks of doing too much versus doing too little are becoming more balanced,” Powell said Friday at a conference hosted by the central bank.The Fed has raised its benchmark federal-funds rate rapidly over the past year to fight inflation, most recently this month to a range between 5% and 5.25%, a 16-year high. Officials have indicated that their decision on whether to raise rates again at their June 13-14 policy meeting could be a close call. A handful have said inflation and economic activity aren’t slowing enough to justify leaving rates unchanged. But others, including Powell, have hinted that they might skip a rate rise to assess the effects of their past increases and the banking-sector strains. Inflation is slowly easing, but it’s still far from the Federal Reserve’s 2% target. WSJ’s Nick Timiraos explains how 2% became the central bank’s sweet spot, and what happens when the U.S. economy strays too far from it. Photo Illustration: Preston JesseePowell spoke on a panel discussion with former Fed Chair Ben Bernanke and frequently read from prepared remarks. While the Fed hasn’t made any decisions about upcoming moves, “given how far we have come, we can look at the data and evolving outlook and make careful assessments,” Powell said.Powell addressed the so-called separation principle in which central bankers use emergency lending tools to address financial- and credit-market disruptions so that their monetary policy tools—primarily, interest rates—can stay focused on combating high inflation.The Fed quickly implemented a broad lending backstop to ease banking turmoil in March after the collapse of two midsize banks on March 10 and March 12. The Fed raised interest rates at its meetings one week later to combat high inflation. It raised rates again on May 3, days after the failure of a third bank.But Powell said there were limits to how much it could divorce monetary policy from financial-market stabilization efforts. “Our tools have separate objectives, but the effects are often not entirely independent,” Powell said. “Because they’re so intertwined, to me, there is not likely to be an absolute and complete separation of the tools–nor is that possible or desirable.”Earlier, New York Fed President John Williams presented research at the conference showing the Covid-19 pandemic didn’t change estimates of a “neutral” interest rate that neither stimulates nor restricts demand, a finding with important implications for how high officials may raise rates to slow the economy.Between the 2008 financial crisis and the 2020 pandemic, Fed officials and economists had concluded the neutral rate of interest—or the level that balances supply and demand when the economy is operating at full strength—had declined sharply. That, together with weak growth following the crisis, ushered in a period of historically low interest rates.Williams said a widely followed model used to estimate the inflation-adjusted neutral rate of interest showed “there is no evidence that the era of very low natural rates of interest has ended.”If estimates of the neutral rate of interest shifted higher, officials could conclude that the rates needed to slow inflation would be considerably higher. If those estimates haven’t changed, then the fed-funds rate might be expected to return to less than 3% if the Fed succeeds in bringing inflation down to its 2% target over the next few years. Powell said the Fed was committed to bringing inflation down to its 2% goal. “Failure to get inflation down would not only prolong the pain but also increase, ultimately, the social costs of getting back price stability, causing even greater harm for families and businesses,” he said.","news_type":1},"isVote":1,"tweetType":1,"viewCount":78,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"upFlag":false,"length":30,"xxTargetLangEnum":"ORIG"},"commentList":[],"hasMoreComment":false,"orderType":2}