Markets reacted far too exuberantly on the Fed chairman’s comments and should wait for more inflation data before diving in.
| Financial markets’ exuberant response to US Federal Reserve chairman Jerome Powell’s press conference on Wednesday ought to be treated with far greater caution.easing in the pace of rate rises from 0.5 percentage points to 0.25 percentage pointsThey loved his view on the likelihood of the US economy avoiding a recession; that governments were “flush” with cash and could cut taxes; and that inflation was coming down fast.
“But our forecast is that it will take some time and some patience, and that we will need to keep rates higher, for longer, but we’ll see ... we’ll see,” he said. “There’s a lot of spending coming in the construction pipeline, both private and public. And so, that’s going to support economic activity.
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