Bloomberg Surveillance Instant Reaction: Jay Powell on Fed Policy
Jun 12, 2024
Fed Chair Jay Powell discusses the Federal Reserve's interest rate decision, inflation trends, and the impact of recent economic data. The podcast analyzes Powell's remarks on payrolls data, unemployment rate projections, and factors guiding Fed's rate cuts. It also explores bond market influence on interest rates, Fed policy forecasts, and unpredictability in bond yields.
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Fed Holds Rates, Adjusts Forecasts
- The Fed held interest rates steady but adjusted forecasts showed slower disinflation than expected.
- Yields fluctuated sharply as markets digested mixed signals from inflation data and the Fed's dot plot.
Fed Divided on Rate Cuts
- The Federal Reserve is divided sharply into two camps about rate cuts for 2024.
- This polarity reflects uncertainty on inflation and labor market trends impacting policy decisions.
Labor Market Perplexes Fed
- The labor market remains strong but the Fed suspects payrolls data may be overstated.
- This creates confusion in policy outlook as the Fed looks for more sustained evidence of cooling.