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Fed Chair Powell: No Rate Cuts Yet– More Hikes Ahead?

On Thursday, Federal Reserve Chairman Jerome Powell called talk of cutting rates premature and suggested there could be further rate hikes ahead. In an address to Congress, Powell noted that the economy was “at close to maximum employment” and inflation was “low and stable,” suggesting that the Fed’s current policy, including the 2% federal funds rate, was appropriate. However, he also noted that the Fed was “in an environment of ongoing adjustment,” indicating that more hikes are possible if the economic situation changes. He stated that “sustained adjustments in the stance of monetary policy are possible” in the future. While the Fed has held interest rates steady in recent months, Powell noted that it was too soon to rule out further rate hikes. He noted that it was important to look at historical trends when making decisions about the future direction of monetary policy. Powell’s comments suggest that the Fed is unlikely to make any major policy shifts in the near future. The Fed is currently in a wait-and-see mode, looking at economic data and making decisions on a case-by-case basis. Powell’s comments come amid increasing pressure from President Trump, who has been critical of the Fed and its policies for much of his presidency. The next Fed meeting is scheduled for September 25-26, and it is likely that the central bank will wait until then to make any major decisions about its future policies. Until then, investors will be keeping a close eye on economic data to see if the Fed shifts its stance.