Powell Stays Strong
Fed Chair, Jerome Powell, stuck to his guns yesterday, despite some pretty overwhelming pressure from the White House to decrease interest rates. Good on you, Mr Powell!
During yesterday’s meeting, officials at the Federal Reserve voted to keep rates steady in line with its ‘patient’ outlook on monetary policy – much to the President’s disappointment. Powell justified his actions by pointing out that the economy was growing at a steady pace with the exception of slightly lower inflation.
The fact that both economic growth (+3.2%) and March jobs (+196k) outstripped economists estimations by some distance motivated Powell’s decision to keep rates steady with inflation below the 2% target. This approach speaks to a strong outlook from the Fed, which clearly sees an improving economic environment on the horizon, rather than a worsening one.
Equity markets dipped during yesterday’s session with the S&P 500 falling 0.94% as many investors were expecting a slightly softer tone from the Fed. On the flip side, the Dollar appreciated across the board, rising 0.54% against a basket of major currencies.
Analysts are forecasting more strength for the Dollar if this flexible but steady outlook can be backed up by more strong fundamental data from the US economy. Solid Stuff, Mr Powell, show ‘em who’s boss.
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