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Important summary of Jerome Powell's press conference
Powell acknowledges the negative ramifications of the Omicron strain on growth, but the repercussions will soon fade.
The Fed believes that the virus is still dangerous
The labor market is strong when you look at it by many measures, and the unemployment rate is declining sharply to 3.9%.
Inflation is now spreading strongly to much of the sector.
Inflation may continue to rise as wages rise
Inflation poses many risks to those who do not have easy access to food and housing.
The Fed is committed to the goal of price stability
The Fed must prevent inflation from accelerating
The Fed is working on full employment and price stability
The Fed will end its bond-buying program at the beginning of March
The economy does not need support and easy monetary policies
The economic outlook is uncertain
The Fed has yet to announce the timing or pace of monetary policy
- Powell does not deny the possibility of raising interest rates at every next meeting of this year.
- Powell acknowledges that there is room to raise interest rates.
- The Fed's budget is very large, and the Fed will move faster than previously expected.
When asked about market volatility, Powell said that financial conditions affect the Fed as much as they do the Fed's bilateral objective.
- Powell says that the market expects to raise rates 3 times, and expects to tighten monetary policy later in the day.
- Powell says the communication with the markets is strong, the markets know in advance what the Fed will do. This reduces the possibility of the market angering any decision from the Fed.
The Fed will decide the interest rate next March.
The Fed focuses on risks from around the world.
Omicron will dampen global growth, but only temporarily.
The Fed will use its tools so that inflation does not become entrenched.
If the Fed sees that inflation will become sustainable, it will intervene immediately.
The federal budget is much larger than it should be.
- Scary and sustainable inflation, and the Fed will adopt policies that take into account all the consequences.
China's policy to curb the spread of the Corona virus is causing an increase in supply chain bottlenecks.
