On January 30, 2025, Federal Reserve Chairman Jerome Powell is scheduled to deliver a speech that is highly anticipated by market participants and economists. The speech will focus on the Federal Reserve’s response to the latest data on the Consumer Price Index (CPI) and inflation in the United States.
CPI Increase and Inflation in December 2024
The latest report showed that in December 2024, the CPI increased by 0.4% from the previous month, the largest increase in nine months, mainly driven by rising energy costs. On an annualized basis, the CPI rose 2.9%, slightly above expectations. However, core inflation, which excludes food and energy prices, showed signs of easing with a 0.2% increase in December, after four consecutive months of 0.3% increases.
Expectations for Powell’s Speech
In his speech, Powell is expected to provide insight into how the Federal Reserve will respond to the latest inflation data. While there are signs of easing in core inflation, a higher-than-expected CPI increase could influence future monetary policy decisions. Some analysts expect the Federal Reserve to maintain its current interest rate at its upcoming meeting, while continuing to monitor inflation and other economic indicators.
Impact on Markets and the Economy
Powell's speech will be an important indicator for market participants regarding the future direction of monetary policy. If the Federal Reserve signals that it will maintain or even raise interest rates to address inflation, this could affect the stock and bond markets. Conversely, if there are indications that inflation is considered under control and there is a possibility of a rate cut, this could provide a positive boost for the market.
Overall, Jerome Powell's speech on January 30, 2025, will provide important insights into how the Federal Reserve views the current inflation situation and the steps it will take to ensure future economic stability.