Fed’s Powell fails to signal taper timeline, says near-term rate-hike unlikely



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Fed’s Powell fails to signal taper timeline, says near-term rate-hike unlikely

On Friday, US Fed Chair Jerome Powell said in remarks to annual Central Bankers’ Jackson Hole economic conference that an ongoing recovery in US economy would more likely to sustain and reiterated his view that a blistering rise in inflation indicators would be momentary even as economic data released earlier in the day had revealed further rise in US inflation, while the Fed Chair did not provide any clues on when the Central Bank would begin to taper its monthly $120 billion bond repurchase program, however, added that the Central Bank might trim its asset purchases ‘this year.’ Aside from that, speaking in the annual Jackson Hole economic conference, Fed’s Powell also had hinted that the US Federal Reserve would stay cautious about raising interest rates as it was still awaiting the economy to reach full employment, as Powell was quoted saying that he would be avoiding to chase a ‘transitory’ inflation which in effect could potentially hinder job growth.

However, latest remarks from Powell were widely contemplated as a defence in favour of Fed’s dovish policy introduced more than a year earlier.

US Fed Chair Powell flags delta risk, awaits full employment

On top of that, addressing to a rapidly surging delta cases across the globe that could potentially threaten global economic recovery, Fed’s Powell added that the risks stemming from a further spread in delta cases would have to be revaluated before going into taper-talk debates ahead of the US Federal Reserve’s September 21-22 policy meet.

Nevertheless, earlier in the day, Government data had revealed that the US Fed’s key inflationary gauge, core PCE (Personal Consumption Expenditure) price index, had been up by 4.2 per cent over past twelve months through July, more than a double of the US Central Bank’s target of 2 per cent.

However, Powell remained utterly dovish and had botched to give any precise indication on when a bond taper program could be initiated.