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   From: black.skank@ajc.com   
      
   On 24 Aug 2023, Culture War  posted some   
   news:uc7rfu$3gou0$12@dont-email.me:   
      
   > Biden and the Democrats don't care.  They are enemies of the USA.   
      
   Jay Powell has warned that inflation “remains too high”, raising the   
   prospect of further interest rate increases in the world’s largest economy   
   should price pressures persist.   
      
   In a highly anticipated speech on Friday, the chair of the US Federal   
   Reserve at times struck a hawkish tone, pointing to the central bank’s   
   readiness to maintain a “restrictive” policy to bring inflation down to   
   its 2 per cent target.   
      
   “Although inflation has moved down from its peak — a welcome development —   
   it remains too high,” Powell said at the Fed’s annual economic symposium   
   in Jackson Hole, Wyoming.   
      
   “We are prepared to raise rates further if appropriate, and intend to hold   
   policy at a restrictive level until we are confident that inflation is   
   moving sustainably down toward our objective,” he added.   
      
   But he tempered that message with a pledge to proceed “carefully” as the   
   Fed navigates the final stages of its campaign to stamp out the worst   
   inflation shock in decades.   
      
   Headline US inflation, according to the consumer price index, was 3.2 per   
   cent for July, well down from its peak of 9.1 per cent, but above June’s   
   rate of 3 per cent.   
      
   Powell said the Fed was now focused not only on the risk of tightening   
   monetary policy too little and allowing inflation to become entrenched but   
   also of raising rates too high. “Doing too much could also do unnecessary   
   harm to the economy,” he said.   
      
   The two-year Treasury yield, which is sensitive to changes in interest   
   rate expectations, rose 0.05 percentage points to 5.07 per cent following   
   Powell’s remarks, while the benchmark 10-year US Treasury yield added 0.01   
   percentage points to 4.25 per cent.   
      
   Equities swung between small gains and losses, with the S&P 500 stock   
   index up 0.3 per cent just after midday and the Nasdaq Composite also 0.3   
   per cent higher.   
      
   “I think the Fed is very happy with the set-up that they have right now,”   
   said Eric Winograd, director of developed market economic research at   
   AllianceBernstein. “They have maximum flexibility.”   
      
   Since March 2022 the Fed has lifted its benchmark policy rate from near   
   zero to a range of 5.25 per cent to 5.5 per cent, a level that Powell on   
   Friday said would be “restrictive” on growth, the labour market and   
   inflation.   
      
   While Powell said the full effects of past rate rises had not yet   
   materialised and probably meant “significant further drag in the   
   pipeline”, he said the Fed was focused on the upside risk to inflation. He   
   cautioned that additional evidence of persistently strong growth could   
   jeopardise progress on getting inflation down and “warrant further   
   tightening of monetary policy”.   
      
   The Fed faces a difficult task in the coming months. First officials must   
   decide whether they need to raise the benchmark policy rate beyond the   
   current 22-year high. Then it needs to work out how long to keep rates   
   elevated before implementing any cuts.   
      
   The central bank is widely expected to forgo another rise in interest   
   rates at its next policy meeting in September. Some market participants   
   are anticipating a final quarter-point increase at its meeting in late   
   October, but it has not been fully priced in. Rate cuts are not expected   
   until well into 2024.   
      
   John Roberts, who worked for 35 years at the Fed, said he expected the   
   central bank to skip a September rate rise and then reassess at later   
   meetings.   
      
   “If core inflation is around 3.5 per cent by December, then I think they   
   will never pull the trigger [on another increase],” said Roberts, now a   
   senior adviser at Evercore ISI. Core inflation, according to the Fed’s   
   preferred personal consumption expenditures index, hovered at 4.1 per cent   
   as of June.   
      
   Powell’s warning on Friday comes at a fraught moment for financial   
   markets, which have recently struggled to digest a recent surge in US   
   borrowing costs. Once adjusted for inflation, the “real” yield on the 10-   
   year Treasury note is at its highest point in more than a decade. Mortgage   
   rates have also soared.   
      
   While there is a lively debate over whether more rate rises will be   
   needed, officials are more unified in their view that hitting the   
   inflation target will take some time, requiring the Fed to keep monetary   
   policy tight.   
      
   “The broader suite of data has proven to the market to be much more   
   resilient than anticipated — that’s opening up the door to the Fed holding   
   policy rates higher for longer,” said Meghan Swiber, US rates strategist   
   for BofA Global Research.   
      
   https://www.ft.com/content/a1506faf-ced9-4be7-b2f7-2f4c12375786   
      
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