Fed Chairman Jerome Powell on massive rate hike, inflation crisis: RECAP
The Federal Reserve raised interest rates by 0.75 basis points, the most since 1994, in an historic move to tackle inflation now running at a forty-year high.
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| Symbol | Price | Change | %Change |
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| CRM | $171.34 | +6.78 | +4.12% |
The Dow Jones Industrial Average picked up momentum after Federal Reserve Chairman Jerome Powell wrapped his press conference, teasing another possible 75 basis point rate at the next meeting.
Boeing, Microsoft and Salesforce led the Dow's gains.
"The next meeting could could well be about a decision between 50 and 75 that would put us at the end of the July meeting. You know, in that range, in that more normal range. And that's a desirable place to be because you begin to have more optionality there about the speed with which you would proceed going" he detailed.
"You have two job vacancies essentially for every person actively seeking a job. And that has led to a real imbalance in wage negotiating. You could get to a place where where that ratio was was a more at a more normal level. And you wouldn't you would expect to see those wage pressures move back down to level with people are still getting healthy wage increases, real wage increases, but at a level that's consistent with two percent inflation" he said.
The Federal Reserve now sees the unemployment rate at 3.7% this year, up from 3.5%. Powell sees job growth slowing...
"What we want to see is a series of declining monthly readings for inflation. And we like to see inflation headed down. So but, you know, and right right now, our policy rate is well below neutral" Powell explained. The Fed is aiming for 2% inflation.
"We at the Fed understand the hardship that high inflation is causing. We're strongly committed to bringing inflation back down and we're moving expeditiously to do so. We have both the tools we need and the result that it will take to restore price stability on behalf of American families and businesses" said Powell.
Ester George, President of the Kansas City Federal Reserve
"Voting against this action was Esther L. George, who preferred at this meeting to raise the target range for the federal funds rate by 0.5 percentage point to 1-1/4 percent to 1-1/2 percent" policymakers disclosed.
Gas prices are sitting at $5.01 per gallon nationally, partly pushing the Fed to raise its inflation forecasts for 2022 to 5.2%...Powell explains
FED RAISES RATES 75 BPS FED: ESTHER GEORGE DISSENTS, WANTED 50 BPS
INFLATION IMPACTED BY SUPPLY & DEMAND IMBALANCES
RUSSIAN INVASION, CHINA LOCKDOWNS DISTURBING SUPPLY CHAINS
BALANCE SHEET RUNOFF CONTINUES AS SCHEDULED FED REVISES
INFLATION FORECAST UP TO 5.2% FOR 2022 FED DOWNGRADES GDP TO 1.7%
FOR 2022 FED FORECASTS AT LEAST THREE 50 BPS HIKES, ONE 25 BPS HIKE FOR 2022
FED FORECASTS AT LEAST ONE 50 BPS HIKE IN 2023
FED SEES AT LEAST ONE 50 BPS RATE CUT IN 2024
Source: FOMC Statement
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