All three New York stock indexes turned positive after Powell’s speech
“US economy is in a good position to deal with monetary tightening”
“The Fed is strongly committed to stabilizing inflation and the US economy is well positioned to deal with monetary tightening,” Federal Reserve Chairman Jerome Powell said on the morning of the 22nd (local time).
In a speech prepared for the Senate Banking Committee hearing today, according to CNBC and MarketWatch, Chairman Powell said the central bank is doing its best to keep inflation down, and the pace of further rate hikes will depend on the data and the evolving economic outlook.” said.
photo = AFP
He refuted market concerns that monetary tightening would lead directly to a recession, saying US gross domestic product (GDP) has recovered since the weak first quarter and consumer spending remains strong.
Chairman Powell said last week that the Fed will choose between 50bps or 75bps at its July 26-27 meeting. This brings the US standard (policy) interest rate closer to 3%.
According to forecasts released last week, the median forecast by Fed officials is that rates will peak below 4% next year, but many economists expect rates to rise above this level.
Chairman Powell told lawmakers that inflation surprised the central bank and that “there could be more surprises.”
“With strong aggregate demand and greater-than-expected and prolonged supply constraints, price pressure has spread across a wide range of goods and services,” he said. .
Meanwhile, while Chairman Powell’s speech to the Senate, which coincided with the opening of the stock market, was in progress, the New York Stock Exchange, which opened with a decline, turned positive in all three major indices within an hour of opening.
The Dow Jones Industrial Average rose about 0.2% to 30,599.77, while the S&P 500 rose 0.3% and the Nasdaq gained nearly 1%.
By Kim Jung-ah, staff reporter kja@hankyung.com
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