• Jerome Powell, Chairman of the U.S. Federal Reserve: Delivered an important speech yesterday, where he provided clarifications about monetary policy and inflation. Here are more details about the speech and its impacts: ..
• Key Statements from Powell: ..
- Inflation: Powell confirmed that the Fed is working to reduce inflation to its target of 2%. He noted that inflation is still slowly declining as a result of recovery from major economic shocks that occurred in 2021 and 2022.
- Interest Rate: The key interest rate was reduced 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.
- The 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 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 of rising interest rates or an improving U.S. economy.
- Oil: The price of oil rose after Powell's speech. This may be due to expectations of increased demand for oil as a result of the improving U.S. economy.
• Future of Monetary Policy: ..
- Interest Rate Cuts: Any future decisions regarding additional cuts to interest rates will primarily depend on incoming economic data, especially concerning inflation rates and labor market performance.
- Monetary Policy: The Federal Reserve intends to proceed cautiously in the upcoming phase, as hasty decisions may lead to economic instability...