Powell contradicts yesterday’s speech today after stock market crash
2023.03.08 13:02
Powell contradicts yesterday’s speech today after stock market crash
By Tiffany Smith
Budrigannews.com – Jerome Powell, chair of the Federal Reserve, reiterated on Wednesday that the central bank would raise interest rates more frequently and possibly faster. However, he emphasized that the debate was still ongoing and that a decision would depend on data that would be released before the policy meeting in two weeks.
Powell told the Financial Services Committee of the United States House of Representatives, “If – and I stress that no decision has been made on this – but if the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes,” in testimony that added a cautionary clause to the otherwise identical message he delivered to a Senate committee on Tuesday.
ACTION ON THE MARKET:
STOCKS: To 3,995.09 BONDS, the S&P 500 gained 8.72 points, or 0.22 percent: The yield on the 10-year note issued by the United States Treasury was 3.9481 percent as of Tuesday evening, down from 3.975%. The euro was off 0.01% and the dollar file was additionally consistent
JACK ABLIN, Boss Speculation Official, CRESSET CAPITAL, CHICAGO.
“At this point, investors worry that the Fed will tighten too much and go overboard. We have the largest inversion in over 40 years, and over the last seven times, this has caused a recession. My dissatisfaction stems from the fact that the Chairman is riding a bicycle and is looking down at his pedals rather than over the handles bars.
If you look at consumer sentiment and small business sentiment, it is evident that we are heading lower. Economic growth is heading pretty low, and with it likely inflation. Sadly, it takes anywhere from 18 months to three years between rate hikes and subsequent declines in inflation, economic growth, earnings, and everything else. Investors share my concerns, and if he raises 50 basis points based on a February number, he is at best naive.
“You have to wait about three years between the peak of the fed funds rate and the subsequent peak of the unemployment rate in history. Sadly, the current jobs market is actually a response to the fed funds rate from March of last year, not this March’s.
“It is like turning on the hot water in the shower and waiting for it to come through the nozzle. If you keep turning the dial and the hot water is still cold, you will eventually burn yourself, and I’m afraid the Fed will burn us,”
VICTORIA SCHOLAR, LONDON, INTERACTIVE INVESTOR, HEAD OF INVESTMENT
“This session is somewhat lackluster. It’s possible that markets are attempting to recoup some of Tuesday’s losses as a result of a somewhat impulsive response. And maybe the marketing was a little too much.”
“Just because of the implications for Fed policy in March, Friday’s jobs report is probably going to be one of the most important non-farm payrolls reports we’ve had in a while.
“The US jobs report will be on my mind a lot; A move of 50 basis points would be more likely if the report and wage growth are both strong. Therefore, it almost seems as though good economic news is worse for the market.”
“The Fed will take this as a sign to take more aggressive action as though the economy is kind of strong enough to take it,” says “if the economy looks like it’s still robust with tightness in the labor market.”
“(Powell) has been) pretty adamant; he has dashed hopes that we were close to the turning point where the Fed was close to pausing rates,” he stated.
“The mantra that’s going to continue, at least until the end of the week until the data (from the February employment report), which could pour gasoline or water on it,”
