USD: Powell: Mixed Producer Price Index Speech
FED Chairman Jerome Powell said US economy looks resilient and Labor market is doing well. I am have confidence inflation will be lower in this year and rates will be stay for Longer time until inflation depreciates. Housing rents is increasing in the US and quite low in the recent months and Roll over leasing is not decreasing. PPI Data is showing Mixed in the recent months and GDP data is target to 2% in the coming months. Still labour shortage happening in the more companies.
EURUSD is moving in Descending channel and market has reached lower high area of the channel
Federal Reserve Chairman Jerome Powell Discusses US Economic Performance and Policy Outlook at the Foreign Bankers’ Association’s Annual General Meeting in Amsterdam
Key Points from Jerome Powell’s Speech:
– Powell highlights the strong performance of the US economy, emphasizing robust labor market conditions and healthy household finances.
– Consumer spending and business investment remain strong, despite ongoing labor shortages across various industries.
– Powell acknowledges the mixed nature of the Producer Price Index reading, indicating uncertainty in certain economic indicators.
– He discusses the gradual cooling in the labor market, with signs of supply and demand coming into better balance.
– Inflation in Q1 did not show significant progress, prompting the need for patience in monetary policy implementation.
– Powell expresses confidence in continued GDP growth of 2% or better and expects the labor market to remain strong while rebalancing.
– However, he anticipates inflation to move back down to levels more consistent with previous years, though with less certainty.
– The Chairman emphasizes the importance of maintaining current policy rates for longer to address inflation concerns, suggesting a cautious approach to future rate hikes.
– Powell notes the complexities of housing inflation, particularly regarding rent increases and market rate dynamics, indicating longer-than-expected lags in certain areas of the economy.
USD: Powell: Less Confidence in Inflation Decline
Federal Reserve Chairman Jerome Powell provided an optimistic assessment of the US economy, highlighting its resilience and the strong performance of the labor market. Powell expressed confidence that inflation would decrease over the course of the year and indicated that interest rates would remain unchanged for an extended period until inflation subsides.
USD Index Market price has broken Ascending channel in downside
Powell noted an increase in housing rents in the US, which have remained relatively low in recent months, with no significant decrease in rollover leasing. He pointed out that data on the Producer Price Index (PPI) has been mixed in recent months, indicating some uncertainty in economic indicators. Despite this, Powell maintained a target GDP growth rate of 2% in the coming months.
Additionally, Powell acknowledged ongoing labor shortages in many companies, suggesting that despite the overall positive economic outlook, challenges persist in certain sectors due to a lack of available workforce.
Fed’s Powell: Bullish on US Economy, Cautious on Inflation Outlook
Expanded Version:
Federal Reserve Chair Jerome Powell delivered an optimistic evaluation of the current state of the U.S. economy during a banking event in Amsterdam on Tuesday. He expressed confidence in continued above-trend growth and anticipated a decrease in inflation, although recent data has slightly undermined his certainty.
Powell stated, “I expect that inflation will move back down … on a monthly basis to levels that were more like the lower readings that we were having last year.” However, he admitted, “my confidence in that is not as high as it was,” acknowledging the unexpected acceleration in inflation during the first three months of the year.
Despite the uncertainty surrounding inflation, Powell suggested that further rate hikes by the Federal Reserve were unlikely. He emphasized, “I don’t think that it is likely based on the data we have that the next move that we make will be a rate hike,” indicating a preference for maintaining the current policy rate.
His remarks echoed those made during the Fed’s recent press conference, although he noted that the April data on producer prices, which rose faster than expected, presented a “mixed” picture due to revisions in prior data. The upcoming release of consumer price information for April was anticipated as a more significant data point.
Investors are currently anticipating an initial rate cut in September, with the Fed’s benchmark policy rate remaining steady within a range of 5.25% to 5.5% since July. The uncertainty regarding rate decisions is partly attributed to the strength of the U.S. economy, which has sustained stronger-than-expected growth despite significant monetary tightening by the Fed.
Powell reiterated his outlook for continued growth and job creation, particularly buoyed by immigration. He projected the economy to grow by approximately 2% this year, slightly surpassing the Fed’s estimates of its underlying potential. Powell emphasized the strength of the labor market, noting that it is “about as tight as it was before the pandemic in 2019.”
Regarding immigration’s impact on the economy, Powell highlighted the significant contribution of immigrants in filling job vacancies and stimulating economic activity. He underscored the economic benefits of immigration, stating, “They are getting work permits and they go to work and they’re paying taxes and they’re creating economic output and there are millions of them.”
USD: Live: Fed Chair Powell Addresses Bankers in Amsterdam
Federal Reserve Chairman Jerome Powell provided an upbeat assessment of the US economy, emphasizing its resilience and the strength of the labor market. Powell expressed optimism that inflation would decrease over the course of the year and indicated that interest rates would remain unchanged for an extended period until inflation subsides.
GBPUSD has broken the Descending channel in upside
He noted an uptick in housing rents in the US, which have remained relatively low in recent months, with no significant decrease in rollover leasing. However, Powell highlighted mixed signals in the Producer Price Index (PPI) data in recent months, indicating some uncertainty in economic indicators. Despite these challenges, Powell reaffirmed the target GDP growth rate of 2% in the coming months.
Nevertheless, Powell acknowledged ongoing labor shortages in many companies, suggesting that despite the overall positive economic outlook, challenges persist in certain sectors due to a lack of available workforce.
Federal Reserve Chair Jerome Powell is scheduled to deliver a keynote address on Tuesday at the annual general meeting of the Foreign Bankers’ Association in Amsterdam. This appearance marks Powell’s first public speaking engagement since the Federal Open Market Committee (FOMC) reaffirmed its decision to maintain the benchmark interest rate, a stance it has upheld since July 2023.
Policymakers continue to express concerns regarding inflation, noting a lack of sufficient evidence indicating progress towards the Fed’s targeted 2% annual rate. Recent economic indicators have revealed higher-than-anticipated price levels, both in consumer goods and at the wholesale level, alongside heightened short-term expectations in consumer sentiment.
Despite the prevailing concerns, market expectations persist for the Fed to enact rate cuts later in the year. Powell, in his remarks following the FOMC meeting, expressed skepticism about the likelihood of rate increases from the current levels.
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