Jerome Powell's Speech
Jerome Powell, the Chairman of the U.S. Federal Reserve, delivered an important speech yesterday, providing clarifications on monetary policy and inflation. Here are more details about the speech and its impacts:
*Key Statements by Powell:*
- *Inflation*: Powell emphasized that the Fed is working to reduce inflation to its target of 2%. He noted that inflation is still slowly declining due to the recovery from the major economic shocks that occurred in 2021 and 2022.
- *Interest Rate*: The key interest rate was cut by 25 basis points to a range of 4.25%-4.5%. This decision reflects a monetary policy aimed at achieving economic stability while continuing to face inflation challenges.
- *U.S. Economy*: Powell indicated that the U.S. economy is performing very well, and there are no reasons to believe that a recession is more likely than usual.
*Impact of Powell's Speech on the Markets:*
- *Stocks*: Technology stocks rose after Powell's speech, while the Dow Jones index declined. This reflects investors' expectations that monetary policy will remain accommodative to support economic growth.
- *Gold*: The price of gold fell below $1,800 per ounce. This may be a result of expectations for rising interest rates or an improving U.S. economy.