Federal Reserve Chairman Jerome Powell delivered his highly anticipated speech in Jackson Hole, Wyoming, making several notable statements.
Fed Chairman's Speech
Jerome Powell expressed increased confidence in reaching the 2% inflation target. He stated that it is time to ease monetary policy, adding that the timing and pace of interest rate cuts will depend on incoming data and the balance of risks.
Market Reaction
During Powell's speech, Bitcoin prices rose, exceeding $62,000. However, they have since pulled back slightly and are trading at $61,500. The Dollar Index (DXY) fell below 101 for the first time since December.
Future Plans
After years of near-zero interest rates, the Fed began a long period of rate hikes in early 2022, raising rates to 5.25%-5.50% in 2023. For over a year, the Fed has kept rates steady in this range, waiting for greater confidence that inflation would reach its 2% target before starting to cut rates. The next question is by how much the Fed will cut rates at its September meeting. According to CME FedWatch, the probability of a 25 basis point cut is 67.5%, while the probability of a 50 basis point cut is 32.5%.
Jerome Powell's speech in Jackson Hole signaled to markets a likely easing of monetary policy in the near future.
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