Powell stated that the condition in the labor market is very tight, which is a signal sending out to the lawmakers that the central bank was able to meet the maximum employment target under prevailing conditions, which throws the doors open for tackling inflation.
Powell Sees Liftoff of Fed Rate in March as Ukraine
Fogs Outlook
According to Bloomberg News, Federal Reserve Chair, Jerome Powell stated that the central banks
might increase interest rates later in March so that hot inflation can be tamed amidst a labor
market that is tight and while the ongoing invasion of Russia of Ukraine makes things uncertain in
the US outlook.
Powell stated that the condition in the labor market is very tight, which is a signal sending out to the
lawmakers that the central bank was able to meet the maximum employment target under prevailing
conditions, which throws the doors open for tackling inflation. He said that the employers were
finding it difficult to fill the vacant positions while workers were leaving their current jobs to work
for better prospects, pushing the wages to rise the fastest in many years.
Uncertainty rules
Financial markets have been reeling ever since Russia initiated the invasion of Ukraine, causing the
price of energy to skyrocket amidst growing tensions that cast an uncertain shadow on growth across
the globe. The interest rate futures markets for a quarter-point interest rate increase are fully priced at
the meeting on March 15th-16th, from the current levels being close to zero and with many Fed
officials talking about invasion but have said that there is still inclined to act.
Bloomberg News reports that Powell’s remarks have done little to alter the market convictions. The
interest rate futures have continued to price about five rate increases in 2022 beginning this month.
The hike in March will mark the first hike in rates since 2018. The yields from US Treasury dropped
a little following Powell’s remarks.
You can read the full content:
https://businessupside.com/2022/03/02/powell-sees-liftoff-of-fed-rate-
in-march-as-ukraine-fogs-outlook/
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