Bloomberg Intelligence Instant Reaction: Jay Powell on Fed Policy
7 snips
Nov 7, 2024 Rick Reeder, a top figure in fixed income at BlackRock, and journalist Mike McKee, dive into the recent interest rate cuts by the Federal Reserve. They dissect the potential impacts on stock indices and the bond market, as well as the Fed's strategy amid upcoming elections. The conversation touches on economic complexities like inflation and tariffs, exploring how these factors influence investor sentiment and market dynamics. They also analyze the Fed's balancing act in crafting future policies against a backdrop of changing economic indicators.
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Fed Opens Door to Optionality
- The Fed has opened the door to optionality around pausing rate cuts depending on incoming data.
- Powell emphasized a gradual, data-dependent approach leading to possible restraint in December and beyond.
Powell Affirms Fed Independence
- Fed Chair Powell firmly stated he would not resign if asked and that the law forbids the president from demoting Fed officials.
- This underscored Fed independence amidst political pressures.
Sticky Inflation in Services, Shelter
- Inflation shows signs of stickiness, particularly in services and shelter costs.
- Lower mortgage rates might be needed to stimulate housing supply and ease inflationary pressure.