{"id":9463,"date":"2023-11-10T02:08:32","date_gmt":"2023-11-10T02:08:32","guid":{"rendered":"https:\/\/lendingsensibly.com\/business\/fed-chair-powell-the-us-economy-may-be-more-resistant-to-interest-rates\/"},"modified":"2023-11-10T02:08:33","modified_gmt":"2023-11-10T02:08:33","slug":"fed-chair-powell-the-us-economy-may-be-more-resistant-to-interest-rates","status":"publish","type":"post","link":"https:\/\/lendingsensibly.com\/?p=9463","title":{"rendered":"Fed Chair Powell: The US economy may be more resistant to interest rates"},"content":{"rendered":"
\n

\n Federal Reserve Chair Jerome Powell is leaving the door open for additional interest rate hikes to defeat inflation, he said Thursday.\n <\/p>\n

\n \u201cWe know that ongoing progress toward our 2% goal is not assured: Inflation has given us a few head fakes,\u201d Powell said at a conference hosted in Washington, DC, by the International Monetary Fund. \u201cIf it becomes appropriate to tighten policy further, we will not hesitate to do so.\u201d\n <\/p>\n

\n If the Fed hikes again, it will likely only be once, and may come during the US central bank\u2019s upcoming policy meeting in December. However, investors are bullish about another pause in rate hikes next month, according to fed funds rate futures.\n <\/p>\n

\n As Powell began to deliver his speech, he was interrupted by climate protesters who made their way onto the stage. It\u2019s the second time in the past month that the Fed Chair has been interrupted during an appearance, after he was escorted off stage in October at the Economic Club of New York, and it clearly raises questions about security.\n <\/p>\n

\n After returning to the podium, Powell made it clear the Fed is carefully balancing the risk that inflation could reignite versus the risk that the central bank could cause unnecessary economic damage.\n <\/p>\n

\n He said \u201cthe unwinding of pandemic-related supply and demand distortions is playing an important role in the decline of inflation.\u201d But he added that demand will likely have to slow for the central bank to be assured that inflation is on track to cool to 2%.\n <\/p>\n

\n Stocks fell broadly Wednesday, with yields spiking following Powell\u2019s comments. The S&P 500 closed the day 0.8% lower. The Nasdaq Composite dropped 1%, and the Dow fell 221 points, or 0.7%.\n <\/p>\n

\n Powell wants to see weaker demand
\n<\/h2>\n

\n The US economy expanded at a scorching 4.9% annualized rate in the third quarter, thanks to robust consumer spending. American shoppers doling out for high-profile concerts, films and travel was a hallmark of the summer\u2019s robust economic strength.\n <\/p>\n

\n That could potentially be a headache for the Fed, since strong demand could be maintaining some upward pressure on prices. The Fed\u2019s mechanism of addressing inflation is by deliberately slowing demand through higher interest rates.\n <\/p>\n

\n \u201cGoing forward, it may be that a greater share of the progress in reducing inflation will have to come from tight monetary policy restraining the growth of aggregate demand,\u201d Powell said.\n <\/p>\n

\n Interest rates are currently at a 22-year high and the Fed has signaled that it will likely keep rates elevated for longer. Cooling the economy through high interest rates might be trickier than in the past, Powell said.\n <\/p>\n

\n \u201cIt may be that the US economy is structurally a little bit more resilient to to interest rates,\u201d he said, pointing to homeowners who locked in an ultra-low mortgage rate during the pandemic and are not selling their property because of elevated rates for home loans.\n <\/p>\n

\n The central bank\u2019s latest set of economic projections released in September reflected fewer rate cuts next year than previously estimated.\n <\/p>\n

\n Powell and other Fed officials have suggested that higher bond yields are playing an important role in cooling the economy since it translates into higher borrowing costs.\n <\/p>\n

\n \u201cThese higher rates are actually affecting people\u2019s mortgages, the costs of all their floating-rate debt is is being affected, so it\u2019s having an effect on the economy,\u201d Powell said.\n <\/p>\n

\n Treasury yields soared in October, but began to slide following the Fed\u2019s policy meeting earlier this month, with some of it due to the possibility the Fed could be done raising rates.\n <\/p>\n

\n Powell said it\u2019s not clear exactly what pushed up yields, and that \u201cthere are many candidate explanations \u2014 five or six of them \u2014 it\u2019s easy to get to a half dozen explanations.\u201d Either way, the central bank will watch the bond market closely to help inform its future policy moves.\n <\/p>\n

\n Meanwhile, other Fed officials suggested in public speeches Thursday that the central bank may not need to raise rates further.\n <\/p>\n

\n Interim St. Louis Fed President Kathleen O\u2019Neill Paese said during a speech in Jeffersonville, Indiana, that the job market\u2019s steady slowdown over the past year and the recent run-up in Treasury yields were two key reasons why she supported the Fed\u2019s decision to hold rates steady earlier this month.\n <\/p>\n

\n And ongoing uncertainty over the economy might mean the Fed \u201ccan afford to await for further data before concluding that additional policy tightening is appropriate,\u201d she said.\n <\/p>\n

\n Richmond Fed President Thomas Barkin hinted that the Fed could forgo additional action because the economy perhaps hasn\u2019t felt the full impact of the Fed\u2019s previous 11 rate hikes just yet.\n <\/p>\n

\n \u201cIn aggregate, we are still not seeing the full effects of policy,\u201d Barkin said during a discussion in New Orleans.\n <\/p>\n

\n \u2014 CNN\u2019s Krystal Hur contributed to this report.<\/em>\n <\/p>\n<\/p><\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Federal Reserve Chair Jerome Powell is leaving the door open for additional interest rate hikes to defeat inflation, he said Thursday. \u201cWe know that ongoing progress toward our 2% goal is not assured: Inflation has given us a few head fakes,\u201d Powell said at a conference hosted in Washington, DC, by the International Monetary Fund. \u201cIf it becomes appropriate to tighten policy further, we will not hesitate to do so.\u201d If the Fed hikes again, it will likely only be once, and may come during the US central bank\u2019s upcoming policy meeting in December. However, investors are bullish about another<\/p>\n","protected":false},"author":1,"featured_media":9315,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[],"class_list":["post-9463","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"yoast_head":"\nFed Chair Powell: The US economy may be more resistant to interest rates | LendingSensibly<\/title>\n<meta name=\"description\" content=\"Federal Reserve Chair Jerome Powell is leaving the door open for additional interest rate hikes to defeat inflation, he said Thursday. \u201cWe know that\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/lendingsensibly.com\/?p=9463\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Fed Chair Powell: The US economy may be more resistant to interest rates | LendingSensibly\" \/>\n<meta property=\"og:description\" content=\"Federal Reserve Chair Jerome Powell is leaving the door open for additional interest rate hikes to defeat inflation, he said Thursday. \u201cWe know that\" \/>\n<meta property=\"og:url\" content=\"https:\/\/lendingsensibly.com\/?p=9463\" \/>\n<meta property=\"og:site_name\" content=\"LendingSensibly\" \/>\n<meta property=\"article:published_time\" content=\"2023-11-10T02:08:32+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-11-10T02:08:33+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/lendingsensibly.com\/wp-content\/uploads\/2023\/11\/gettyimages-1771408510.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"450\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/lendingsensibly.com\/?p=9463\",\"url\":\"https:\/\/lendingsensibly.com\/?p=9463\",\"name\":\"Fed Chair Powell: The US economy may be more resistant to interest rates | LendingSensibly\",\"isPartOf\":{\"@id\":\"https:\/\/lendingsensibly.com\/#website\"},\"datePublished\":\"2023-11-10T02:08:32+00:00\",\"dateModified\":\"2023-11-10T02:08:33+00:00\",\"author\":{\"@id\":\"https:\/\/lendingsensibly.com\/#\/schema\/person\/bba58c936ef25612e663af4208f0833e\"},\"description\":\"Federal Reserve Chair Jerome Powell is leaving the door open for additional interest rate hikes to defeat inflation, he said Thursday. \u201cWe know that\",\"breadcrumb\":{\"@id\":\"https:\/\/lendingsensibly.com\/?p=9463#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/lendingsensibly.com\/?p=9463\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/lendingsensibly.com\/?p=9463#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/lendingsensibly.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Fed Chair Powell: The US economy may be more resistant to interest rates\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/lendingsensibly.com\/#website\",\"url\":\"https:\/\/lendingsensibly.com\/\",\"name\":\"FinMarkPros\",\"description\":\"Latest Finance News and Updates\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/lendingsensibly.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/lendingsensibly.com\/#\/schema\/person\/bba58c936ef25612e663af4208f0833e\",\"name\":\"admin\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/lendingsensibly.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/61700406310641358e8710e46179ca8b1a1beb6bc27b125bf3bf34fa7db4e240?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/61700406310641358e8710e46179ca8b1a1beb6bc27b125bf3bf34fa7db4e240?s=96&d=mm&r=g\",\"caption\":\"admin\"},\"sameAs\":[\"https:\/\/lendingsensibly.com\"],\"url\":\"https:\/\/lendingsensibly.com\/?author=1\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Fed Chair Powell: The US economy may be more resistant to interest rates | LendingSensibly","description":"Federal Reserve Chair Jerome Powell is leaving the door open for additional interest rate hikes to defeat inflation, he said Thursday. \u201cWe know that","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/lendingsensibly.com\/?p=9463","og_locale":"en_US","og_type":"article","og_title":"Fed Chair Powell: The US economy may be more resistant to interest rates | LendingSensibly","og_description":"Federal Reserve Chair Jerome Powell is leaving the door open for additional interest rate hikes to defeat inflation, he said Thursday. \u201cWe know that","og_url":"https:\/\/lendingsensibly.com\/?p=9463","og_site_name":"LendingSensibly","article_published_time":"2023-11-10T02:08:32+00:00","article_modified_time":"2023-11-10T02:08:33+00:00","og_image":[{"width":800,"height":450,"url":"https:\/\/lendingsensibly.com\/wp-content\/uploads\/2023\/11\/gettyimages-1771408510.jpg","type":"image\/jpeg"}],"author":"admin","twitter_card":"summary_large_image","twitter_misc":{"Written by":"admin","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/lendingsensibly.com\/?p=9463","url":"https:\/\/lendingsensibly.com\/?p=9463","name":"Fed Chair Powell: The US economy may be more resistant to interest rates | LendingSensibly","isPartOf":{"@id":"https:\/\/lendingsensibly.com\/#website"},"datePublished":"2023-11-10T02:08:32+00:00","dateModified":"2023-11-10T02:08:33+00:00","author":{"@id":"https:\/\/lendingsensibly.com\/#\/schema\/person\/bba58c936ef25612e663af4208f0833e"},"description":"Federal Reserve Chair Jerome Powell is leaving the door open for additional interest rate hikes to defeat inflation, he said Thursday. \u201cWe know that","breadcrumb":{"@id":"https:\/\/lendingsensibly.com\/?p=9463#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/lendingsensibly.com\/?p=9463"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/lendingsensibly.com\/?p=9463#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/lendingsensibly.com\/"},{"@type":"ListItem","position":2,"name":"Fed Chair Powell: The US economy may be more resistant to interest rates"}]},{"@type":"WebSite","@id":"https:\/\/lendingsensibly.com\/#website","url":"https:\/\/lendingsensibly.com\/","name":"FinMarkPros","description":"Latest Finance News and Updates","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/lendingsensibly.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/lendingsensibly.com\/#\/schema\/person\/bba58c936ef25612e663af4208f0833e","name":"admin","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/lendingsensibly.com\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/61700406310641358e8710e46179ca8b1a1beb6bc27b125bf3bf34fa7db4e240?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/61700406310641358e8710e46179ca8b1a1beb6bc27b125bf3bf34fa7db4e240?s=96&d=mm&r=g","caption":"admin"},"sameAs":["https:\/\/lendingsensibly.com"],"url":"https:\/\/lendingsensibly.com\/?author=1"}]}},"_links":{"self":[{"href":"https:\/\/lendingsensibly.com\/index.php?rest_route=\/wp\/v2\/posts\/9463","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lendingsensibly.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lendingsensibly.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lendingsensibly.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/lendingsensibly.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=9463"}],"version-history":[{"count":1,"href":"https:\/\/lendingsensibly.com\/index.php?rest_route=\/wp\/v2\/posts\/9463\/revisions"}],"predecessor-version":[{"id":9464,"href":"https:\/\/lendingsensibly.com\/index.php?rest_route=\/wp\/v2\/posts\/9463\/revisions\/9464"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/lendingsensibly.com\/index.php?rest_route=\/wp\/v2\/media\/9315"}],"wp:attachment":[{"href":"https:\/\/lendingsensibly.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9463"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lendingsensibly.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9463"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lendingsensibly.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9463"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}