Key takeaways
- Federal Reserve Chair Jerome Powell made comments at a symposium in Sweden on January 10 that, if taken out of context, could be seen as precursors of unpopular Fed policy in coming months.
- In reality, the Fed has been transparent about upcoming rate hikes. There is nothing new about what Powell said in Stockholm.
- Everyone is on the edge of their seat, waiting to see what the Fed does next. However, any plans the Fed has could easily be upended by disturbances in the global economy.
When taken out of context, the words Jerome Powell spoke on January 10, 2023, feel ominous:
“…restoring price stability when inflation is high can require measures that are not popular in the short term as we raise interest rates to slow the economy. The absence of direct political control over our decisions allows us to take these necessary measures without considering short-term political factors.”
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