Here are a few words and phrases to watch for in the Fed's post-meeting statement on Wednesday and in Fed Chair Jerome Powell's news conference, and what...
FILE PHOTO: Federal Reserve Chairman Jerome Powell speaks during a meeting of the Economic Club of New York in New York
Here are a few words and phrases to watch for in the Fed's post-meeting statement on Wednesday and in Fed Chair Jerome Powell's news conference, and what they might suggest for the future path of interest rates.Inflation by the Fed's preferred gauge was 3.4% in September, down by more than half from last summer's peak but still well above the U.S. central bank's 2% goal.
The adverb is meant to convey a central bank no longer barreling ahead with ever-tighter policy, as it did last year when it drove the policy rate up in chunks of as much as 75-basis-points at a time. Look for Powell to repeat both phrases or use very similar words to signal that another rate hike is still an option and that interest-rate cuts are nowhere in the foreseeable future.Fed policymakers have in recent weeks cited the rise in longer-term borrowing costs and the consequent tightening of financial conditions as reasons for holding off on any further increase in short-term interest rates.
That's not a word that Powell himself uses, although he and others sometimes describe their views on the "balance" of risks between doing too little with rate hikes and allowing inflation to stay high, and doing too much and risking unnecessary harm to the economy. A few of Powell's colleagues have said those risks have recently become roughly balanced; Powell has not.
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