Fed to 'proceed carefully' amid rising Treasury yields, economic strength: Powell
Investing.com – Federal Reserve Chairman Jerome Powell on Thursday said the Fed is"proceeding carefully" on monetary policy decisions following a spike in Treasury yields that have helped tighten financial conditions"significantly," though acknowledged that signs of ongoing economy growth could warrant further monetary policy tightening.
Highlighting the backdrop of a still tight labor market and the 11-rate hikes delivered so far - that could still tighten financial conditions - Powell said the Federal Open Market Committee, or FOMC, is"proceeding carefully," on monetary policy decision. The Fed chief, however, acknowledged that the jump in Treasury yields has tightened financial conditions and could help the Fed in its battle to rein in inflation.
"Financial conditions have tightened significantly in recent months, and longer-term bond yields have been an important driving factor in this tightening," Powell said in prepared remarks Thursday for a speech at the Economic Club of New York Luncheon, New York. The remarks from Powell arrived just as the yield on the 10-year Treasury flirted with 5% for the first time since 2007 followingThe most recent measure of core PCE showed a slowdown in the pace of inflation to 3.9% in August from 4.3% previously, though that is still well ahead of the Fed’s 2% target.We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other.
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