Investors Still Tune In as Fed Chair Testifies Before US Lawmakers

Federal Reserve Chair testified before the US Senate on Tuesday, saying, “There is no need to hurry in changing the current monetary policy stance.”

Key Quotes:

Powell stated, “The economy is strong.”

The Fed Chair affirmed that “labour market conditions are significantly improving.”
Powell mentioned that inflation rates are becoming closer to the central bank’s target.
Powell also pointed out that “the Fed is paying close attention to the risks surrounding its dual mandate,” referring to maximizing employment and stabilizing prices.

He anticipated that quarterly inflation forecasts might indicate stable rates at low levels.

Powell confirmed that the current monetary policy stance is appropriate given the risks and uncertainties.

“We may keep the monetary policy unchanged for a longer period if the economy continues to show more strength while inflation does not move in a downward direction.”

He added, “The strength of the labour market no longer poses a threat to the economy recently.”

“We avoid lowering interest rates ‘too much or too quickly.'”

“We may lower interest rates if labour market conditions unexpectedly deteriorate or inflation falls faster than expected.”

Powell said, “I think we should reconsider bank closures,” emphasizing that the Fed has done a lot for “Silicon Valley Bank.”

He confirmed that “the Fed continues its work concerning bank tests.”

He expressed his desire for stress tests for banks to remain as flexible as possible to help them adapt to legal changes.