In a speech given today on the US Monetary Policy Forum in New York City, Federal Reserve President Jerome Powell emphasized the vigilant approach of the central bank amidst economic uncertainties.
Powell Repeated To maintain the current interest rates, the reader of the Federal Reserve, “Waiting and see” to adopt the stance because it monitors recent policy changes and impacts of economic indicators.
“We don’t need to be in a hurry, and are well deployed to wait for more clarity,” he said.
Powell highlighted the strengthening of the US labor market, given that employers added 151,000 jobs in February, leading to average monthly job profit since September to 191,000.
The unemployment rate increased slightly by 4.1%, which remains within a narrow range between 3.9% and 4.2% compared to the previous year.
He observed that wage hikes have moderated for a more sustainable speed, aligning labor supply and demand, reducing inflation pressure from the labor market.
He said, “Wage growth and better balance with labor supply and demand, the labor market is not an important source of inflation pressure,” he said.
Inflation trends
Addressing inflation, Powell mentioned a peak of above 7% to 2.5% from its mid -2022 summit. He warned that recently the reading remains a few% above the Federal Reserve.
Powell said, “The way to return inflation in our goal is bumpy, and we hope that it will continue.”
He emphasized the importance of not over-dominating for short-term fluctuations and reiterated the central bank’s commitment to ensure that the inflation trends closely monitors the trends so that they align with long-term goals.
“Inflation may be unstable every month, and we are not more than one or two readings that are more than anticipated,” he said.
Business policies and monetary approaches
Pavel recently touched the trade policies, including the Trump administration announcements and later delays on import tariffs affecting business partners such as Mexico, Canada and China.
These policy changes have contributed to the instability in the market and complicated the economic approach. Powell emphasized the need for clarity in these areas before making any adjustments to monetary policy, stating that the central bank is well deployed to wait for more clarity on the economic approach.
Given these factors, Powell indicated that the Federal Reserve is likely to keep its major interest rate unchanged in the coming months. The Central Bank had previously cut the benchmark interest rate from 4.25% to 4.5% in 100 basis points at the end of 2024 and maintained this policy in January.
Crypto reactions
Crypto has responded to Powell’s comments with cautious optimism. From the perspective of the Federal Reserve patient, investors appear confident, although there are concerns about potential stagnation and Trump’s ongoing crypto summit.
Bitcoin is currently trading at $ 88,300.
