US Fed chairman's speech boosts Wall Street

Long-Term Yields Rise Short Fall as Fed Chair Tones Down Rate Hiking Policy

In remarks this week Fed chair Jerome Powell seemed to point to a possible pause in rate hikes as early as next year when he said rates were "just below" some estimates of the neutral rate that could serve as a temporary stopping point as the central bank assesses the impact of its policy changes so far. But signs of a slowdown overseas and almost two months of market volatility - including a sharp selloff last week - have clouded an otherwise mostly rosy USA picture in which the economy is growing well above potential and unemployment is the lowest since the 1960s.

Powell "gave the market, and presumably President Trump, exactly what he wanted, which was an admission that the previously proposed path of future rate hikes was probably too aggressive", Oliver Pursche, chief market strategist at Bruderman Asset Management in NY, told Reuters. The Fed altered its stance on rates to "just below the neutral rate" from its earlier articulated position of "a long way to neutral", lowering the chances of quick increases in the cost of funds.

Powell did not reference the president's criticism in his speech, and there was no mention of the attacks in the Fed's minutes.

Higher interest rates tend to slow economic growth over time as well as pressure stock prices according to Powell.

Speaking to the Economic Club of New York Powell said interest rates were now "just below" the range Fed officials consider neutral, a setting created to neither speed nor slow growth.

Though Mr Powell's comments were markedly different from his characterisation of Fed policy last month, he left ample room for the central bank to continue raising rates, depending on the economy's performance. At that time, Fed policymakers indicated another hike in December, three more in 2019 and probably one more in 2020.

But Powell also noted a number of looming risks, including the slowdown in global growth and the fading economic benefits of the tax cuts and government spending boost that took effect this year as well as the cumulative effect of the Fed's own rate hikes.

Ariana Grande's new video is finally here, 'Thank U' very much
Legally Blonde's Jennifer Coolidge - portrayed as Paulette Bonaforte - was also seen giving sound advises in the song. Kris Jenner is, of course, pop culture's ultimate overprotective momager - and we love her for it.

In his NY speech Wednesday, Powell did not dispute the widely held belief that the Fed will raise interest rates again in December, saying, "There is no preset policy" about tightening. "We have to be thinking about how much further to raise rates and the pace at which we will raise rates".

The Fed is still likely to raise rates in December.

In a continuing series of comments, US President Donald Trump has criticised the Fed's interest rate rises. The Fed's benchmark federal-funds rate since then has been between 2% and 2.25% - or just below the lowest estimate. "I think that was what really sparked the market to go higher".

The Fed has been trying to strike a balance between not moving too fast and risking shortening the economy's longest running expansion versus not moving too slowly and risking the economy overheating. There was also concern that they could cause the economy to slow down excessively.

The Fed raised its benchmark rate in March, June and in September, with the last increase putting it in a range of 2 percent to 2.25 percent.

Responding to the interviewer's comment that he had considered Powell would be a "low-rate person", Trump said: "Well, let's see what happens with Jay Powell".

Related News:



Most liked

‘2.0’ records two-day box office collections of Rs 109 crore
The Hindi version of 2.0 picked up pace at the box office as it entered the weekend, reported trade analyst Taran Adarsh. On the second day (Friday), the collections declined considerably with 48 crores NBOC and 60.50 crores GBOC, coming in.

Deontay Wilder vs. Tyson Fury declared a draw
He says today's fight will be between Tyson Fury who is the boxer and Deontay Wilder who is the banger. Wilder has emerged as a great heavyweight champion, and he continues to prove that.

North Korean soldier defects to South - South's military
Kim agreed to travel to Seoul after hosting Moon in Pyongyang in September for their third summit this year. The survey process began with a South Korean train carrying an inspection team into North Korea on Friday.

Tyson Fury vs Deontay Wilder
That was Klitschko's first loss in 11 years but Wilder goaded Fury by claiming the Ukrainian had been a passive foe. "Now it's my time".

Dubai Rugby Sevens: England third as New Zealand claim title
It also made it double gold for New Zealand at the Dubai World Series, with the women's team winning their tournament yesterday. The Scots scored four tries plus a penalty try against the Shujaa's two tries for the comfortable win.

Hearty handshake between Putin and Saudi crown prince goes viral
Khashoggi , a Post columnist, had gone to the consulate to obtain documents necessary to marry his Turkish fiancee. Five staff from the centre were involved in the Khashoggi operation, the assessment says.

Scientists line up to take aim at research behind gene-edited babies
Chinese scientist He Jiankui speaks at the Second International Summit on Human Genome Editing in Hong Kong this week. He said after his presentation on Wednesday he was proud of what he had done.

U.S., Canada, Mexico Sign Trade Deal After Last-Minute Brinkmanship
ME exported $1.2 billion worth of products to Canada in 2017, 45 percent of its entire exports, according to the trade center. But Trump has argued again this month that those tariffs have fuelled a comeback by the US steel and aluminum industries.

Anthem’s closed alpha starts next weekend - here’s how to get in
The release date is pinned for February 22nd, 2019 on PC, PlayStation 4 and Xbox One. Approved testers will get emailed a download link ahead of the 8 December .

Ex-Dallas Officer Charged With Murder Of Unarmed Black Neighbor
The tense anticipation ahead of Friday's announcement lasted all week, as the grand jury convened for three days beginning Monday. Inside, the lights were off and a figure in the darkness cast a large silhouette across the room, according to Guyger.

What is the G20 summit and why does it matter?
However, delegates to the talks in Buenos Aires said good progress had been made on economic sections of the statement overnight. Putin was the only leader to exchange a warm greeting with the prince, high-fiving him when he entered the main summit room.

Comey challenge to House subpoena goes to court
He's asked the federal district court in Washington, D.C., to both delay Monday's testimony and to quash the subpoenas outright. Hungar also dismissed Comey's claim that he could be damaged in some way by committee members' comments about the interview.

How the New York Public Library Engages Readers With Instagram Stories
As the platform becomes bigger, users may not feel comfortable sharing certain content with a wider audience. On Friday, the photo-sharing network announced the ability to share Stories with a smaller group of friends.

Trump says close to doing something with China on trade
The Saudi foreign ministry said the prince had meetings with his French, South Korean and Mexican counterparts. The assets most sensitive to the trade outcome are likely to be the renminbi and equities, Goldman Sachs said.

Priyanka Chopra & Nick Jonas’ Pre-Wedding Festivities
From the magnificent Royal Wedding in May to #DeepVeer's extravagant celebrations this month, 2018 just can't seem to get enough. Unless, of course, she and Nick decided on a more westernized celebration-though they could also have another wedding in the US.