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Powell’s Taper Acceleration Talks Inflation Temporarily Gives Up Words… New York stock market crash

Federal Reserve Chairman Jerome Powell announced on the 30th (local time) that the Federal Open Market Committee (FOMC) will discuss accelerating tapering. He also said it’s time to stop using the word ‘temporary’ for inflation. U.S. Treasury yields, which had plummeted in the aftermath of the Omicron mutation, in anticipation of the Fed’s postponement of tightening, soared after Powell’s remarks.

“We may consider ending the taper a few months ahead of schedule (mid-next year),” Powell said in a testimony before the Senate Banking Committee.

“There is a greater risk that high inflation will continue,” he said. “High inflation is expected to continue through the middle of next year.” explained.

Powell also said it’s time to stop using the word ‘transitory’ for inflation. “The word temporary has a short lifespan for many people, but we tend to use it to mean that higher inflation won’t leave a permanent mark,” he said. It’s a good time to try to be clearer on what we mean.”

Regarding the omicron risk, he said, “It’s a risk right now and not based on the economic outlook. We’ll know more in the next 10 days or weeks.” “I don’t think the economy will be close to what happened with the shutdown in March or there will be further shutdowns. We’re going to see this disease (coronavirus) probably exist for a long time. And over time, the economic effect will not be there,” he said. I think it will decrease.”

Powell

New York stocks plunged as Chairman Powell continued his testimony. As of 11:43 a.m., the S&P 500 was down 1.58%. The Nasdaq fell 1.71% and the Dow fell 1.58%.

New York = Correspondent Hyunseok Kim [email protected]

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