Fed Chair’s comments on slower hikes to boost EMs

Powell defends Fed charge hikes amid Trump onslaught			 0					By		Marta Subat

U.S. Federal Reserve Chair Jerome Powell injected investors with a strong dose of optimism on Wednesday, saying that the central bank's policy rate is now "just below" estimates of a level that neither brakes nor boosts a healthy U.S. economy, comments that many investors read as signaling the Fed's three-year tightening cycle is drawing to a close.

Powell said on Wednesday that USA interest rates were "just below" neutral, less than two months after saying rates were probably "a long way" from that point. On October 3, he said rates were "a long way" from neutral levels. His remarks Wednesday appeared to suggest to this audience that he might stop sooner or move more slowly.

The upcoming interest rate decision-which will come December 19- will serve as a big signal for both the Fed's conviction for continued economic growth as well as the equity market's resilience to yet another hike.

"The markets really got a head fake in October, (but on Wednesday) he strongly walked back those expectations", said Scott Anderson, chief economist at Bank of the West.

In October 2015, when the Yellen Fed was navigating the hard transition from years of super-low interest rates to a cycle of rate hikes, she got the worst grade of her tenure - an average 2.27 out of 5.

Powell remains upbeat on the economy, forecasting continued solid growth, low unemployment and inflation near the Fed's 2 percent target.

U.S. serial killer Samuel Little confessed to 90 murders, Federal Bureau of Investigation says
The FBI said Little - as a one-time competitive boxer - usually punched his victims to stun or knock them before strangling them. Additionally, numerous killings occurred in the 1970s and early 1980s, before DNA profiling was widely available.

But minutes from the Fed's November 7-8 policy-setting meeting, released on Thursday, as well as remarks over the last two weeks, point to a reassessment of the Fed's longstanding promise of "further gradual rate increases" that would extend two years of almost uninterrupted quarterly tightening. But turning to financial stability, the main topic of his speech, he added, "We know that things often turn out to be quite different from even the most careful forecasts".

On Wednesday, Mr. Powell pointed to the range of neutral-rate projections submitted by 15 Fed officials at their policy meeting in September, varying from 2.5% to 3.5%. But Powell's comments are prompting speculation among many investors that a looser policy may lie ahead.

In his speech, which was focused on the Fed's assessment of the health of the US financial system, Powell said it is "important to distinguish between market volatility and events that threaten financial stability".

One additional twist investors will need to adjust to next year will be the potential for rate changes at any of the Fed's monthly gatherings. "And I'm not blaming anybody, but I'm just telling you I think that the Fed is way off-base with what they're doing".

Minutes released yesterday from the Fed's last policy meeting also showed some policymakers believed going above neutral could slow the economy needlessly. Three of those increases have been under Powell.

The minutes of the Fed's November 7-8 meeting showed that officials expressed concerns about a variety of threats, including the impact of tariffs, a slowing global economy and tightening financial conditions amid falling stock prices. Currently, the fed funds futures are pricing in an 83 percent chance of a December hike and one more in 2019. But that approach is no longer appropriate, Powell said.

Related News:



Most liked

See the Most Dramatic Images from the Earthquake That Rocked Anchorage
While damage assessments are underway, seismologist Lucy Jones said Alaskans can expected to be impacted for awhile. All of the office's duties were handed over to the Fairbanks office, and the meteorologists and staff evacuated.

CAF strips Cameroon of 2019 Africa cup of Nations hosting rights
In August, CAF Chairman Ahmad Ahmad cast doubt over Cameroon's readiness to host Africa's biggest football event. The newly expande24-team tournament will kick-off June 2019.

Teaser for Mean Girls-inspired Thank You, Next vid
Ariana Grande's latest, post-Sweetener single " thank u, next " is now enjoying its third week at number one. Look-a-like: The trailer comes to a close with a brief clip of Grande's best gal pal-Courtney Chipolone.

Oil producers in talks to address market volatility
The counter-trend buyers may be pinning their hopes on the announcement of production cuts at next week's OPEC meeting in Vienna. Brent for January settlement, which expires Friday, dropped 82 cents to $58.69 on London's ICE Futures Europe exchange.

Real Madrid’s Bernabeu to host all-Argentine Copa Libertadores final
In the end, the Copa Libertadores final between Boca Juniors and River Plate will be played next Sunday at the Santiago Bernabeu . The Copa Libertadores is the showpiece club competition in South America, equivalent to the Champions League in Europe.

New shelter in Tijuana to house at least 3,000 migrants, official says
Some migrants, facing months of delays and awful living conditions, are deciding to head back to Honduras. Officials warn that due to the poor sanitary conditions in the migrant camp, Hepatitis is also possible.

Syria state TV says air defenses repelled missile attack
It is not yet clear whether the S-300s were among the air defense systems used in the Thursday night counterattacks. Regime media quoted a military source but did not specify what the target was or where it came from.

Melbourne doctors swallow Lego for science - and one lost his head
And if a Lego head or similar object does go mysteriously AWOL, the pediatricians' advice to parents is not to go looking for it. The average FART score was 1.7 days.

Priyanka Chopra, Nick Jonas arrive in Jodhpur for wedding festivities
The Namaste England actor dressed up in white overalls that she layered with a navy blue cape from Payal Khandwala's collection. It's Priyanka Chopra's world and Nick Jonas is not just living in it. he's living it up.

Barcelona player ratings vs PSV: Messi delivers the slender victory
Ronaldo collected his fifth award a year ago , but appears unlikely to retain his crown and move ahead of bitter rival Messi. Both Barcelona and Juventus have booked their spot in the Champions League knockout round ahead of Match Day 6.

Trump says auto tariffs ‘being studied’ after GM plant closings
A White House rebuke to GM would fly in the face of long-held Republican opposition to picking winners in the marketplace. Economists say the ripple effect of the plant's closure could bring the loss of as many as 10,000 jobs around the Valley.

Marc Lamont Hill fired by CNN over comments about Israel
Hill addressed the issue on Twitter, writing that "my reference to "river to the sea" was not a call to destroy anything or anyone".

Tragic end to multiple mass whale strandings in New Zealand
Twelve pygmy whales washed up on Ninety Mile Beach two days ago but four died before they could be refloated. Whale strandings are relatively common in New Zealand during the Southern Hemisphere spring and summer.

Police Raid Deutsche Bank on Money Laundering Charges
Without providing details about the inquiry, Deutsche Bank stated, "The investigation has to do with the Panama Papers case". "... Two years ago, the release of the Panama Papers gave taxpayers around the world an unprecedented look at offshore tax havens.

G20 opens under assault from Trump on collective action
But, at the same time, he cautioned the USA was prepared to forge ahead with the new tariffs in the belief China would fold first. Financial and commodities markets are closely watching the outcome of the summit, especially a planned meeting between Mr.