A day after knowing that inflation in the US rebounded 5.4% in an interannual rate, the highest data since August 2008, today the president of the Federal Reserve, Jerome Powell, takes the floor before the Financial Services Committeecongressional.At a time when investors have begun to deduct a withdrawal from the stimuli after in the last meeting the members of the Open Market Committee of the Fed (FOMC) advanced to 2023 the rise of the types, the head of theMonetary policy wanted to scare the fears and has assured that there is still "a long way to go" and said that it will keep the debt purchase rhythm unchanged for 120,000 million per month.
Powell has stressed that, although the economy has progressed, it takes time to verify that these advances are not a day flower.Aware of the dependency of liquidity markets, the president of the Fed does not seem willing to make the mistakes of his predecessors.To avoid a collapse like the one lived in 2013 when Ben Bernanke directed the helm of the Central Bank, Powell has clarified that he will be informed in advance before making any decision."As we have said, we will warn in advance before announcing any death on debt purchases," he said.
The president of the FED stressed that the institution considers appropriate to maintain interest rates in the current range of 0-0.25% to reach full employment and that inflation is located in 2% with the possibility of exceeding this levelFor some time without this deriving in an increase in the price of money."Since inflation has remained persistently below 2%, our goal isKeep well anchored in 2%, "he said.
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— Newsweek Sat Jul 10 00:22:32 +0000 2021
Powell has not been able to overlook the latest inflation data and has recognized that after this remarkable increase it is likely that the rate will remain high in the months to later moderate.That is, as he has been defending in recent times he considers that the rise in prices is somewhat temporary fruit to a large extent of the base effect and the impact on prices due to the limitations to production after recent bottlenecks.The dependence that the markets have of liquidity is so high that a premature hardening of monetary policy could lead to strong correction in the markets and put the incipient recovery against the ropes.
The commitment shown by Powell seems to have been enough to scare the ghosts.Investors have taken the opportunity to reinforce their appetite for risk, something that translates into increases in variable income.In the first minutes of Wall Street negotiation, more than 0.5%rises.Powell's words have also helped loosen the pressure that the debt market has been showing.The certainty of an ultra -raw monetary policy is sufficient to stop the rise in profitability.After turning to 1.4% yesterday the profitability of the US bonus falls today to 1.36%.
