1/5/2024 0 Comments Yahoo us trending news"The heat that we see in GDP, is it really a threat to our ability to get back to 2% inflation? That's going to be the question," Powell said. It's merely something the Fed watches to ensure a hot economy doesn't keep prices higher. Powell was clear to highlight though that economic growth, measured by Gross Domestic or GDP, isn't a mandate of the Fed. Powell has warned about the stronger than expected US economy in the past and the Fed is now projecting the economy to grow 2.1% this year up from June's 1.0 % projection. He added: "Broadly stronger economic activity means we have to do more with rates." "It's more about stronger economic activity, I would say." Powell said. But when asked if that's because of inflation's cooldown stalling, Fed Chair Powell offered a different reason. The Federal Reserve is still expecting to hike interest rates one more time this year. Persistent inflation isn't why the Fed is considering one more hike Meanwhile the Nasdaq ( ^IXIC) slumped nearly 1.0%. The Dow Jones Industrial Average ( ^DJI) rose 0.16% while the S&P 500 ( ^GSPC) dropped about 0.5%. Stocks appeared to drop after Powell didn't commit to a soft landing being the base case. If you don’t restore price stability inflation comes back and you can have a long period where the economy is just very uncertain." “The worst thing we can do is fail to restore price stability because the record is clear on that. He said later that a soft landing was a “primary objective,” noting, “that’s what we’ve been trying to achieve for all this time.” But, he highlighted that the path to lower prices is the main focus. “Ultimately this may be decided by factors that are outside our control,” he added. Stocks lose steam after Powell says 'soft landing' isn't the baselineįed Chair Jerome Powell said Wednesday that a 'soft landing," where inflation cools without a widespread economic downturn, isn't the baseline for the path forward but is a “plausible outcome."
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