Fed President Made Critical Statements After Inflation Data!

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Fed Chairman Jerome Powell gave a speech containing slightly hawkish comments. However, he was confident about reaching the target rate of 2%. Powell expressed concerns about hot PPI inflation data. But he noted that the Fed will continue to analyze further inflation data. Bitcoin price lost some ground after PPI came in hotter. Gold prices, on the other hand, saw an increase despite the slightly hawkish tone.

US PPI came hot, the Fed President spoke in a slightly hawkish tone!

cryptokoin.comAs you follow from , US PPI data was on the agenda of the market today. The US Bureau of Labor Statistics announced PPI inflation data for April. US PPI data, although a bit mixed, came in above expectations. Monthly PPI increased by 0.5% against the expectation of 0.3%. Monthly core PPI increased by 0.5%, well above the estimates of 0.2%. While the annual PPI remained stable at 2.2%, the annual core PPI rate increased from a downwardly revised 2.1% to 2.4%. Following this data, Fed Chairman Jerome Powell made some statements.

Powel acknowledged ongoing inflationary pressures and a strong labor market. Against this backdrop, his speech reflected slightly hawkish comments on restrictive monetary policy and interest rate cuts. Progress towards pulling inflation back to the 2% target this year has stalled as some raise stagflation concerns. Powell said the U.S. economy remains resilient thanks to the strong labor market. Speaking about inflation, he alluded to concerns that rising inflation in recent months has caused the Fed to lose confidence in interest rate cuts earlier this year

Highlights from Jerome Powell’s speech

  • The US economy is performing very well.
  • The US economy has a very strong labor market.
  • Households are in good financial shape.
  • Consumer spending and business investment remain strong.
  • There is still a labor shortage in many sectors.
  • Overall, the US economic data so far looks good.
  • The labor market is achieving better balance.
  • The labor market is as tight now as it was before the pandemic.
  • There are signs of gradual cooling in the labor market as supply and demand come into better balance.
  • It was noteworthy that there was no further progress in inflation in the first quarter.
  • We did not expect a smooth road on inflation, we must be patient and let politics do its job.
  • We expect GDP growth to continue at 2% or better.
  • We expect the labor market to continue to rebalance but remain strong.
  • We expect inflation to drop to last year’s levels.
  • Confidence that inflation will decline again is lower than before. My confidence in this regard is not as high as it used to be.
  • The Producer Price Index was quite mixed.
  • Companies are still reporting labor shortages.
  • It may take longer than expected for restrictive policy to reduce inflation, but we will bring inflation back to 2%.
  • It’s a matter of keeping the policy at the current rate for longer.
  • I do not think that the next step will be an interest rate increase, it is more likely that we will keep the policy rate where it is.
  • Housing inflation is a bit of a puzzle.
  • Current rent increases have been low for some time and are not visible in lease agreements.
  • The delays between the decline in market rates and its occurrence are longer than we think.

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