Fed’s Powell Waiting For Recovery Signs Before Raising Rates

Federal Reserve Governor Jerome Powell said on Friday that he wanted to see signs that the U.S. economy was tightening up before before interest rates could be raised.

While acknowledging that employment in the United States had rebounded, Powell highlighted “significant” slack, referring to unemployed or underutilised workers.

The Fed hopes to end its stimulus programme for the U.S. economy by the end of the year, clearing the way for it to eventually raise interest rates.

“I’m looking for some sign the economy is getting tight before we can start thinking about raising rates,” Powell said at an event in London.

Powell added there was a “significant amount of slack in the labour market” in the United States at present.

In brief prepared remarks, Powell said the Fed’s evolving statements about the future path for rates have played an important role in shaping market expectations about U.S. monetary policy.

via SOURCE

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza