{"id":11808,"date":"2023-11-09T19:48:50","date_gmt":"2023-11-09T19:48:50","guid":{"rendered":"https:\/\/infundpros.com\/business\/jay-powell-warns-fed-against-risk-of-being-misled-in-inflation-fight\/"},"modified":"2023-11-09T19:48:50","modified_gmt":"2023-11-09T19:48:50","slug":"jay-powell-warns-fed-against-risk-of-being-misled-in-inflation-fight","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=11808","title":{"rendered":"Jay Powell warns Fed against risk of being \u2018misled\u2019 in inflation fight"},"content":{"rendered":"<div>\n<p>Stay informed with free updates<\/p>\n<p class=\"article__content-sign-up-topic-description\"><span>Simply sign up to the <!-- -->US economy<!-- --> myFT Digest &#8212; delivered directly to your inbox.<\/span><\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=d8dd09b1-4375-4b7e-b81d-39ddc38c49b1&amp;concept-id=6aa143a2-7a0c-4a20-ae90-ca0a46f36f92\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>Federal Reserve chair Jay Powell has warned the US central bank against the risk of being \u201cmisled\u201d by good data on prices, saying the mission to return inflation to its 2 per cent target had a \u201clong way to go\u201d.<\/p>\n<p>Speaking at an IMF event on Tuesday, the Fed chair said officials were \u201cgratified\u201d by the retreat in price pressures but stopped short of sounding the all-clear on an inflation problem that has proven more persistent than policymakers expected.<\/p>\n<p>\u201cWe know that ongoing progress toward our 2 per cent goal is not assured: inflation has given us a few head fakes,\u201d he said in prepared remarks. \u201cIf it becomes appropriate to tighten policy further, we will not hesitate to do so.\u201d<\/p>\n<p>In a sign that there is little urgency in the bank to immediately raise rates again, Powell emphasised the Fed would continue to \u201cmove carefully\u201d, in order to \u201caddress both the risk of being misled by a few good months of data, and the risk of overtightening\u201d.<\/p>\n<p>Powell\u2019s comments, which were briefly interrupted by climate protesters, come on the heels of the central bank\u2019s latest policy meeting, at which officials extended a pause in their historic monetary tightening campaign. <\/p>\n<p>The decision to keep the benchmark interest rate steady at a 22-year high of between 5.25-5.5 per cent for a second-straight gathering reflected greater caution among officials amid a multitude of headwinds that are widely expected to slow growth from the breakneck 4.9 per cent annualised pace registered in the third quarter.<\/p>\n<p>US stocks and government bonds extended their losses on Thursday after Powell\u2019s comments, with the benchmark S&amp;P 500 down 0.6 per cent in mid-afternoon trading.<\/p>\n<p>Treasuries\u00a0remained under pressure, with the 30-year yield up 0.13 percentage points on the day at 4.8 per cent, and the benchmark 10-year yield rising 0.11 percentage points to 4.62 per cent. Bond yields move inversely to prices.<\/p>\n<p>Those moves followed a 30-year Treasury auction earlier in the day. Market participants also said that a ransomware\u00a0attack\u00a0on the Industrial and Commercial Bank of China had disrupted the settlement\u00a0of Treasury trades on Thursday.<\/p>\n<p>Despite further signs that the labour market is losing momentum, officials have been wary to declare that interest rates are now \u201csufficiently restrictive\u201d. Powell reiterated that the Fed was \u201cnot confident\u201d it had yet reached that point.<\/p>\n<p>Whipsawing global borrowing costs have complicated that assessment further. A recent run-up in long-term interest rates, which gained steam ahead of the Fed\u2019s latest meeting, has mostly been unwound. The benchmark 10-year Treasury note trades at roughly half a percentage point lower than its October peak.<\/p>\n<p>Powell suggested last week that tighter financial conditions could help prevent the need for further rate rises given the expected drag on spending and hiring. But he also made clear that the impact of the increase in borrowing costs would largely depend on how long the market move lasted.\u00a0<\/p>\n<p>\u201cWe are attentive to the risk that stronger growth could undermine further progress in restoring balance to the labour market and in bringing inflation down, which could warrant a response from monetary policy,\u201d Powell added on Thursday.<\/p>\n<p>Still, traders in federal funds futures markets broadly expect that the policy rate has peaked, with the debate shifting to when the central bank will begin to cut.<\/p>\n<p><em>Additional reporting by Harriet Clarfelt<\/em><\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.ft.com\/content\/d8dd09b1-4375-4b7e-b81d-39ddc38c49b1\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Stay informed with free updates Simply sign up to the US economy myFT Digest &#8212; delivered directly to your inbox. Federal Reserve&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[],"class_list":{"0":"post-11808","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Jay Powell warns Fed against risk of being \u2018misled\u2019 in inflation fight | inFundPros<\/title>\n<meta name=\"description\" content=\"Stay informed with free updatesSimply sign up to the US economy myFT Digest -- delivered directly to your inbox.Federal Reserve chair Jay Powell has\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/infundpros.com\/?p=11808\" \/>\n<meta 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