Powell’s Powerful Words – Fedspeak in Sweden
As much as we bash Jerome Powell at times, the number of voices and perspectives he must be hearing everyday has to be getting annoying. One group of people is telling him to stop raising rates to preserve the economy, another is telling him to save the economy by raising rates. Someone is telling him to use interest rates as a tool to improve social equality, another to influence the climate. Thankfully, Powell has his boundaries set correctly, and he expressed this to the public.
In a speech to the leaders of central banks over the world in Sweden, Powell stressed that his job is to keep inflation under control and maintain a healthy labor market, instead of all the extraneous things that come with the rates. In what was the most powerful quote of the day, he said “We are not, and will not be, a ‘climate policy maker’,” As central banks around the world have utilized interest rates as part of climate policy, Powell warranted his sentiment by pointing out that the US uniquely doesn’t have a consensus climate policy, and that no move has been made by Congress to position the Fed to do that. This once again is another display of Powell’s mindset on reducing inflation by any means necessary, although the markets did have a positive reaction to the Fedspeak that occurred on Tuesday. Any words Powell has for investors is going to make the market move all over, and we’ll get a lot of that in the next two weeks.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.
