Powell: Fed hasn’t made any rate decisions yet

The president of the Federal Reserve of the United States (Fed), Jerome Powell, clarified this Wednesday that the agency has not yet made a decision on how much it will raise interest rates and that it is waiting to know various economic data.

“We have some potentially important data to analyze (…) Again, we have not made any decisions on the March meeting and we will not until we see the additional data”, he pointed out in a hearing before a committee of the United States House of Representatives.

The next meeting of the Open Market Committee of the fed that must decide on interest rates will be held between March 21 and 22.

Powell thus qualified the words he delivered on Tuesday before a Senate committee, in the first of the two appearances that, by mandate, he has to offer to the Chambers every six months to inform them of the monetary policies carried out by the regulator.

In his opening address to the Senate banking committee, Powell said “if the totality of the data indicates that faster tightening is warranted, we would be prepared to accelerate the pace of rate hikes”, some words that were interpreted as a warning of the acceleration of rates and that made the markets wobble, with falls in the main indices.

Today he repeated the same speech to open the session but, when he got to that part, he introduced a sentence: “And I emphasize that we still do not have the data”, a clarification on which he insisted in the question and answer session.

“We will receive the employment report on Friday and the inflation and Producer Price Index next week, so they will be important and we will analyze them”, specified the president of the US central bank.

The reports that are to come “they will be important in our assessment of the overall direction of the economy and we will look at them carefully”, he added.

In order to reduce inflation, the fed It has carried out a series of rate hikes, eight in the last year.

The last rise occurred on February 1 and was less than the previous ones, at 0.25 points, a figure that seemed to indicate the beginning of a slowdown in restrictive monetary policy.

With this rise, the rates stood in a range of 4.5% and 4.75%, the highest figure since September 2007.

Since it reached its peak in June (9.1%) of 2022, the inflation rate in the United States has eased to 6.4% in January, when it fell for the seventh consecutive month, although only one tenth, a rate of decline that for the Fed is being too slow.

The CPI figure for February will therefore be key, which will be known next Tuesday, and also the unemployment figure, which will be known this Friday, when the United States has one of the lowest unemployment figures in decades, 3.4% in January. .

“We are not on a set path but will be guided by incoming data and the evolving perspectivePowell pointed out.

Source: EFE