Federal Reserve Chairman Jerome Powell is expected to further reinforce his message that there is no rush to cut interest rates, especially after the latest inflation data showed continued price pressures. ing.
Mr. Powell is headed to Capitol Hill, where he is scheduled to give semiannual testimony on monetary policy before a House committee on Wednesday and a Senate committee on Thursday. The head of the U.S. central bank and nearly all of his colleagues have said in recent weeks that the underlying strength of the U.S. economy leaves them with room to be patient when deciding when to cut interest rates.
“The danger of acting too soon is that the job is not done yet, and that the very good indicators we've had over the last six months are somehow not a true indicator of the direction of inflation,” Powell said in an interview. It will be revealed,” he said. on CBS' 60 Minutes on February 5th.
That cautious approach has been validated in recent weeks by data showing inflation accelerated last month. However, it is unlikely to satisfy Democrats who are concerned about how interest rate trends will affect the November presidential election and down-ballot races.
They are expected to press the Fed chief on why officials are risking damage to the economy to keep borrowing costs so high when inflation is so high. There is.
The data highlight this week will be Friday's monthly jobs report. Economists expect employment growth to slow to 200,000 in February, after increasing by 353,000 in the previous month. The unemployment rate is expected to remain at 3.7%, but hourly wage growth is likely to slow.
On Wednesday, the Fed will release its Beige Book survey of local business people across the country. Other data to be released next week includes February's separate survey of service provider purchasing managers, as well as January figures on the trade balance and job openings.
Bloomberg Economics speaks…
Powell is expected to maintain his hawkish stance in his semiannual testimony to Congress, signaling to markets that the Fed is in no hurry to cut rates. If that leads to tighter financial conditions, pressure on the economy will continue and the impact of monetary policy will likely be further delayed. ”
— Anna Wong, Stuart Paul, Eliza Winger, Estelle Wu.
Unlock a world of benefits! From insightful newsletters to real-time inventory tracking, breaking news and personalized newsfeeds, it's all here, just a click away. Log in here!
Get all the Business News, Market News, Breaking News and Latest News on Live Mint. Check out all the latest action on the 2024 Budget here. Download the Mint News app for daily market updates.
Show more Show less
Published: March 3, 2024, 10:09 PM IST