On Thursday (October 19th) local time, after Federal Reserve Chairman Powell delivered a speech, renowned journalist Nick Timiraos, known as the "New Federal Reserve News Agency," shared his latest findings in an article.
Powell said at the New York Economic Club luncheon, "Considering uncertainty and risks, as well as the progress we have made, the Committee (FOMC) is acting cautiously. Data from recent months shows that the Federal Reserve is making progress in maintaining stable inflation and strong employment goals
Timiraos pointed out that Powell continued the comments of his colleagues in recent days, and most of them expressed their readiness to maintain the central bank's interest rate unchanged at the November meeting, partly because the rising US Treasury interest rate in the past month has already achieved the effect of raising interest rates.
Powell said, "We are still concerned about the development of these events, as continuous changes in financial conditions may have an impact on the monetary policy path." He said that whether to raise interest rates again in the future and how long to maintain them near the current level will depend on "the overall situation of the data, the constantly changing prospects, and the balance of risks.
Timiraos believes that the reason why Powell did not announce the end of interest rate hikes on Thursday is because the recent stronger than expected economic activity data makes it difficult for them to make a decision now. Earlier this month, the employment report showed a spurt of growth in non farm employment, and this week's retail sales continued a series of data activity.
He pointed out that, similar to a speech in August this year, when mentioning whether to tighten monetary policy again, Powell used "could" instead of a more powerful "would" to describe the willingness of the central bank.
Powell's speech source: Federal Reserve
Powell also described the slowdown in inflation since June as a "very favorable development" and acknowledged that the September data was "not very encouraging". The prediction work currently facing officials is very challenging, and the recovery of the supply chain and the unexpected economy may have an impact on prices.
If strong consumer spending hinders the progress of "disinflation", they need to further tighten monetary policy; And if inflation continues to decline, we only need to consider how long we will keep interest rates at the current level.
In his speech, Powell stated that his and other officials' "most concerned" salary growth over the past year seems to be slowing down, approaching the level consistent with the Federal Reserve's 2% target.
Timiraos emphasized that this statement is completely different from Powell's earlier this year, when he was concerned about the overheating of the labor market and the risk of simultaneous wage and price increases.
Turning to the phenomenon of selling treasury bond, interest rate analysts said that, in addition to the reason that the Federal Reserve may not cut interest rates as soon as possible, the market also expected that the supply of long-term treasury bond would increase, which led to a decline in the attractiveness of existing treasury bond.