Market Updates
Fed Chairman Powell Reiterates Aggressive Stance On Inflation
Brian Turner
26 Aug, 2022
New York City
In an eight minute short speech, Chairman Powell delivered a forceful reminder of the need to fight inflation now despite the pain it is likely to inflict on the economy.
Chairman Powell forcefully reiterated the central bank's commitment in aggressively fighting the four-decade high inflation before it entrenched and spread to a wider economy.
Powell delivered his comments at the Jackson Hole Economic Symposium, a gathering of central bankers, and said that reducing inflation will take time and will soften the labor market.
The comments were widely viewed and anticipated but the forceful reiteration only highlighted the long road ahead for the policy makers and the near-term pain for households and businesses.
"While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses.
These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain," Powell added in his prepared remarks.
Stock markets turned sharply lower after Powell's comments and bond yields jumped above 3%.
The S&P 500 index declined 1.5% to 4,137.15 and the Nasdaq Composite fell 1.7% to 12,414.95.
Futures of crude oil decreased 12 cents to $92.40 a barrel but natural gas rose 12 cents to $9.46 a thermal unit.
The yield on 10-year U.S. Treasury notes rose to 3.056% and on 2-year notes gained to 3.415%.
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