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You can find the current article at its original source at https://www.theguardian.com/business/live/2018/dec/19/markets-federal-reserve-interest-rate-decision-uk-inflation-business-live
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Federal Reserve chair: Trump won't stop us doing the right thing - business live | |
(35 minutes later) | |
Chair Powell is having quite an impact.... | |
To my earlier point, the markets aren’t loving this... pic.twitter.com/pBbJCGu12n | |
The sell-off is gathering pace! | |
BREAKING: Dow slides more than 400 points as Fed chair Powell delivers news conference after hiking rates; index was earlier up more than 380 pointshttps://t.co/SPz0hnyZMd pic.twitter.com/ue5EJSKkRT | |
Next year, the Federal Reserve will hold a press conference after every meeting (rather than every other meeting). | |
That will be a “big gain” for communication, Jerome Powell says. | |
It also means that the Fed could raise rates more easily at any of its eight meetings (rather than resisting policy changes at non-press conference meetings) | |
Q: Donald Trump wants you to ‘feel the markets’, so what feelings are you getting? | |
Powell plays down the idea that he should be fixated on the stock exchange. | |
What matters to the economy is changes in a range of markets. A little volatility doesn’t leave a mark, he adds. | |
Stocks turn deeper into the red. Dow now down 250 points as Powell not as dovish as expected. pic.twitter.com/sm6aZjcowM | |
If you speak to American companies, you hear that they’re worried about growth prospects, Jerome Powell says. | |
Stocks are now falling sharply in New York. | |
The Dow is now down 1%, or 256 points, having been UP 300 points before the Fed’s announcement. | |
Q: Are you worried about Donald Trump’s statements, and tweets, about the Fed? | |
I’m not worried, Powell replies; he knows everyone at the Fed will keep on doing their job. | |
He explains that the Fed speaks to hundreds of people, and looks at masses of data, before setting monetary policy. | |
Q: How can you tell if the Fed has become a drag on the economy? | |
Powell says the Fed expects decent growth in the US economy next year, of between 2% and 2.5%. So it’ll be watching the data closely to see if that plays out. | |
Fed Chair Jerome Powell says "political considerations" have played no role in Federal Reserve policy https://t.co/2t6GGXtPJy pic.twitter.com/jbSYBSwOpL | |
Q: How did the tightening in financial conditions, trade tensions, and criticism from Donald Trump affect today’s decision? | |
Powell says the Fed took financial conditions into account, and will be watching the situation. | |
On trade, there is ‘broad’ concern among businesses over the strength of the global economy. | |
And on the president’s criticism of the Fed, Powell insists firmly that Trump has no impact at all! | |
Political considerations play no role in our work, Powell insists. | |
The Fed has a mandate from Congress, and it has the tools and the independence it needs to do the job. | |
We at the Fed are absolutely committed to that mission, and nothing will deter us from doing what we think is the right thing to do, Powell declares. | |
There is a “fairly high degree of uncertainty over the path and destination of any further interest rate increases” Powell reiterates. | |
Translation: Those two hikes expected in 2019 are NOT set in concrete. | |
Onto questions, starting with one about recent softening in US inflation data. | |
Chair Powell says this gives the Fed the flexibility to be patient. | |
Jay Powell is now explaining that the Fed’s future decisions aren’t pre-determined. | |
Any future policy changes will depend on the data, he says. | |
Fed's #Powell going to some lengths to reiterate again and again that they will respond to data...there is not a plan...rate hikes are not predetermined | |
The US dollar is bouncing around as Powell speaks.... | |
Powell says most of his colleagues expect the US economy to perform well in the coming year. | |
But they have cut their inflation projections, due to recent ‘tightening in financial conditions’ and slower growth abroad (the eurozone, for example, only grew by 0.2% in the last quarter, with Germany contracting) | |
Jay Powell says that the Fed has lowered its forecast for economic growth next year. That’s why it now expects two more interest rate hikes in 2019, down from 3 before. | |
The Fed chair has arrived, to explain why US interest rates are being raised for the fourth time this year - and the 9th time since the financial crisis ended. | The Fed chair has arrived, to explain why US interest rates are being raised for the fourth time this year - and the 9th time since the financial crisis ended. |
Jerome Powell says the US economy has been performing well over the last three months, with jobs being created, wages up, and inflation stable. | Jerome Powell says the US economy has been performing well over the last three months, with jobs being created, wages up, and inflation stable. |
But there are also signs of softening, as the US economy faces new challenges such as slower growth in some other countries, Powell continues.... | But there are also signs of softening, as the US economy faces new challenges such as slower growth in some other countries, Powell continues.... |
You can watch the press conference live, here. | You can watch the press conference live, here. |
A nice summary: | A nice summary: |
A "somewhat" dovish rate hike by the @FederalReserve : The 25 bps increase in interest rates is accompanied byone less signaled hike for next year (from a total of 3 to 2),a 20 bps cut in the neutral rate estimate,lower GDP projectionBUT still a path that overshoots neutral | A "somewhat" dovish rate hike by the @FederalReserve : The 25 bps increase in interest rates is accompanied byone less signaled hike for next year (from a total of 3 to 2),a 20 bps cut in the neutral rate estimate,lower GDP projectionBUT still a path that overshoots neutral |