FED President Jerome Powell, in his speech after the last FOMC meeting, interest rates were kept constant at the level of 4.5, he said. In the speech, evaluations regarding the policies implemented in line with the current economic appearance were made. Inflation indicators will be closely monitored in order to ensure economic stability.
Quantitative Easing and Inflation
Powell said that inflation is temporary and existing measures may be sufficient in this process. Referring to the steps to prevent the price increase between the United States and Canada, the authority said that the flexible behavior in monetary policy will continue.
In a part of the speech, Powell said that the securities portfolio reduction rate will be reduced from 25 billion dollars to $ 5 billion per month.
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Jerome Powell: “The committee will reduce the monthly fire limit in treasury bonds to slow down the decrease rate of the securities portfolio.”
In the speech, it was emphasized that the tariffs implemented during the Donald Trump period were effective in the formation of inflation. However, this situation did not affect all economic activities, especially the service sector was less damaged than this process said. Powell added that long -term effects have not yet come up in the context of trade voltage.
Market reactions
Failure to change interest rates, while contributing to price stability in the short term, uncertainty in the markets decreased by Powell’s statements. The good news was that the reducing assets will never stop by the end of the year, while a significant step was taken today. After pricing the market excessively, this reproduction is quite positive.
As we approach April 2, it is important that we see explanations that the negotiation continues with trade partners. After overcoming the next 2 weeks, the uncertainty in the risk markets decreases, while the US employment data may further further feed the risk appetite.
According to evaluations, Powell’s speech and monetary policy steps invites investors to be careful despite the uncertainties in the economy. The methods described are evaluated within the scope of the measures to be applied step by step in the light of economic data.
Responsibility Rejection: The information contained in this article does not contain investment advice. Investors should be aware that crypto currencies carry high volatility and thus risk and carry out their operations in line with their own research.
