Powell: Recent Inflation Data Does Not Provide Confidence
and Confirms Interest Rates Will Remain High for a Longer Period

Federal Reserve Chairman Jerome Powell confirmed what financial markets mostly anticipated, stating that it is likely that the Federal Reserve will respond to the recent surge in inflation by maintaining a higher standard interest rate for an extended period.

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In his first public remarks following the official reports last week on inflation,
which showed a slower-than-expected decline in consumer prices,
Powell stated that the latest economic data did not give policymakers confidence
that inflation is on track to return to the central bank’s target of 2% annually.

This means that the Federal Reserve will delay any interest rate cuts,
which have been maintained at the highest level in 23 years to combat inflation.

However, Powell noted that he believes the interest rate is high enough at its current range of 5.25% to 5.5%, indicating that he does not support further interest rate hikes, as some Federal Reserve officials have recently suggested.

Powell said, “Clearly, the recent data did not give us more confidence; instead, it suggests that it will likely take longer than expected to achieve this confidence. However, we believe that the policy is well-positioned to handle the risks we face.”

These statements represent a shift in Powell’s tone, who earlier in the year described two unexpectedly hot inflation reports as bumps in the road, not reflections of a trend of rising consumer prices.

The markets reacted after Federal Reserve Chairman Powell moved more decisively towards a hawkish direction, fundamentally confirming that the downward trajectory of inflation has essentially halted.

Gold futures are now down 0.34% at $2399 per ounce, while spot gold prices stabilize at $2383 per ounce, after having reached an all-time high of $2431.29 on Friday. On the other hand, the dollar index records a level of 106.070 points.

Powell: Recent Inflation Data Does Not Provide Confidence

Powell: Recent Inflation Data Does Not Provide Confidence

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