Jerome Powell is sending the wrong signals – one comment

There he is again, the Jerome “Jay” Powell that Wall Street has come to appreciate so much over the past few years. At the press conference on Wednesday, the head of the US Federal Reserve (Fed) once again unleashed price fireworks. As planned, he raised the key interest rate by 0.5 percentage points. But overall, Powell has been less aggressive on the anti-inflation issue than many had expected.

The balance sheet total is being reduced more slowly than initially feared. It grows when the central bank buys securities to lower interest rates on the capital markets. Ultimately, the balance sheet total signals how expansive monetary policy is.

He also ruled out an interest rate hike of 0.75 percentage points for the time being. For the stock markets, these were welcome signals of relief. It was the best day on the NYSE since May 2020 – the Nasdaq technology exchange, which has recently come under heavy pressure, rose by more than three percent. Powell, the friend of the markets, is back.