{"id":3330,"date":"2023-10-19T18:11:31","date_gmt":"2023-10-19T18:11:31","guid":{"rendered":"https:\/\/infundpros.com\/business\/federal-reserve-chair-pledges-to-move-carefully-on-rates-amid-range-of-uncertainties\/"},"modified":"2023-10-19T18:11:31","modified_gmt":"2023-10-19T18:11:31","slug":"federal-reserve-chair-pledges-to-move-carefully-on-rates-amid-range-of-uncertainties","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=3330","title":{"rendered":"Federal Reserve chair pledges to move carefully on rates amid \u2018range of uncertainties\u2019"},"content":{"rendered":"<div>\n<p>Unlock the Editor\u2019s Digest for free<\/p>\n<p class=\"article__content-sign-up-topic-description\"><span>Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/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=1f0cec7d-78e0-4ee0-98ca-9c0d5e8aa06f\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>The Federal Reserve will proceed \u201ccarefully\u201d with forthcoming monetary policy decisions, its chair said on Thursday, in the latest indication that the US central bank is preparing to hold interest rates steady at its meeting later this month.<\/p>\n<p>Jay Powell struck a cautious tone just days before the central bank\u2019s scheduled \u201cblackout\u201d period ahead of a two-day meeting starting on October 31, after which public communications are limited. <\/p>\n<p>Powell pointed to a range of risks officials now must consider as they determine how much more to squeeze the world\u2019s largest economy to tame inflation. But he also emphasised that the impact of the Fed\u2019s rate-raising campaign of the past 18 months was not yet fully visible.<\/p>\n<p>\u201cA range of uncertainties, both old and new, complicate our task of balancing the risk of tightening monetary policy too much against the risk of tightening too little,\u201d he said in prepared remarks at an event hosted by the Economic Club of New York.<\/p>\n<p>\u201cGiven the uncertainties and risks, and how far we have come, the [Federal Open Market Committee] is proceeding carefully.\u201d<\/p>\n<p>The outlook for Fed\u2019s interest rate policy has been muddied recently by mixed economic data and added geopolitical tensions sparked by the Israel-Hamas war.<\/p>\n<p>The \u201chighly elevated\u201d geopolitical tensions \u201cpose important risks to global economic activity\u201d, the Fed chair said, with \u201chighly uncertain\u201d implications.<\/p>\n<p>A jump in US borrowing costs has also complicated the Fed\u2019s assessment of how much higher to raise interest rates in its quest to tame inflation, especially at a time when price pressures persist in corners of the economy and labour demand remains elevated.<\/p>\n<p>The yield on the benchmark 10-year Treasury note jumped to 4.996 per cent \u2014 its highest level since July 2007 \u2014 after Powell spoke. The two-year Treasury yield, which moves with interest rate expectations, dipped by 0.03 percentage points to 5.19 per cent, as investors bet that a quarter-point rate increase at the next Fed meeting was unlikely.<\/p>\n<p>Many officials \u2014 including Lorie Logan, the hawkish president of the Dallas Fed, and governor Christopher Waller \u2014 have suggested that the surge in yields could offset the need for the central bank to raise rates again this year. Fed policymakers previously indicated they thought the central bank would need to lift rates at least once again this year to beat back inflation.<\/p>\n<p>Powell said the Fed was \u201cattentive\u201d to the rise in yields, which could have \u201cimplications for the path of monetary policy\u201d.<\/p>\n<p>In a discussion after his remarks, Powell said the recent rise in borrowing costs did not appear to reflect market expectations of higher inflation or changes to the short-term outlook for rates. <\/p>\n<p>Rather, he said the rise in yields could reflect market participants\u2019 views that the economy had proven more resilient than expected, or traders\u2019 concerns about fiscal deficits. Asked if the moves in the bond market could offset the need for further Fed rate rises, Powell said: \u201cAt the margin it could.\u201d<\/p>\n<p>The Fed first pressed pause on its historic interest-rate rising campaign in June, after 10 consecutive increases, before raising rates by a quarter-point again in July. It also opted against an increase at its meeting last month. <\/p>\n<p>But even as the pace of monetary tightening has slowed, officials insist it is too early to declare victory in the fight against inflation.\u00a0<\/p>\n<p>Officials have been surprised by the strength of the US economy, which has retained momentum despite one of the most aggressive rate-rising campaigns in the Fed\u2019s history. <\/p>\n<p>Powell said this could reflect that demand is less affected by changes in interest rates than in the past \u2014 or that rates have not been \u201chigh enough for long enough\u201d.<\/p>\n<p>He also hinted that the short-term \u201cneutral rate\u201d \u2014 a term used by economists to refer to the rate level that neither stimulates nor suppresses demand \u2014 could now be higher than in the past.<\/p>\n<p>Powell said the Fed would continue to watch for evidence that growth was not slowing sufficiently, or that the labour market remained tight, either of which \u201ccould warrant further tightening of monetary policy\u201d.<\/p>\n<p>The event at which Powell spoke was initially delayed after protesters stormed the stage, saying that climate-related risks posed the biggest threat to the global economy.<\/p>\n<p><em>Additional reporting by Kate Duguid in New York<\/em><\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.ft.com\/content\/1f0cec7d-78e0-4ee0-98ca-9c0d5e8aa06f\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. The Federal&#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-3330","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>Federal Reserve chair pledges to move carefully on rates amid \u2018range of uncertainties\u2019 | inFundPros<\/title>\n<meta name=\"description\" content=\"Unlock the Editor\u2019s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The Federal Reserve will\" \/>\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=3330\" \/>\n<meta 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