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22-09-2022, 11:53 AM
the"dot.com" era of dow jones at 30,000 points and nasdaq at 10,000 points and above
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https://www.ft.com/content/af12dcb4-bab2...41ca58cd1d
Jay Powell refused to rule out a recession in the world’s largest economy as the Federal Reserve implemented a third consecutive 0.75 percentage point rate rise and published a much gloomier set of projections.
Powell’s downbeat commentary on the economy came as the Federal Open Market Committee lifted its benchmark interest rate to a target range of 3 per cent to 3.25 per cent on Wednesday and signalled an intention to keep monetary policy tight as it fights soaring inflation.
“No one knows whether this process will lead to a recession or if so, how significant that recession would be,” Powell said in response to a question about whether higher rates would hurt the economy. Avoiding such an outcome would depend on how quickly wage and price inflation abates and whether the red-hot jobs market starts to cool down, he added.
“The chances of a soft landing are likely to diminish” because monetary policy needs to be “more restrictive or restrictive for longer”, Powell warned during a press conference following the rate rise announcement.
His remarks followed the publication of a new “dot plot” of Fed officials’ interest rate projections that reinforced the central bank’s commitment to a “higher for longer” approach. The forecast showed the benchmark rate rising to 4.4 per cent by the end of this year before peaking at 4.6 per cent next year.
Please use the sharing tools found via the share button at the top or side of articles. Copying articles to share with others is a breach of FT.com T&Cs and Copyright Policy. Email licensing@ft.com to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found at https://www.ft.com/tour.
https://www.ft.com/content/af12dcb4-bab2...41ca58cd1d
Jay Powell refused to rule out a recession in the world’s largest economy as the Federal Reserve implemented a third consecutive 0.75 percentage point rate rise and published a much gloomier set of projections.
Powell’s downbeat commentary on the economy came as the Federal Open Market Committee lifted its benchmark interest rate to a target range of 3 per cent to 3.25 per cent on Wednesday and signalled an intention to keep monetary policy tight as it fights soaring inflation.
“No one knows whether this process will lead to a recession or if so, how significant that recession would be,” Powell said in response to a question about whether higher rates would hurt the economy. Avoiding such an outcome would depend on how quickly wage and price inflation abates and whether the red-hot jobs market starts to cool down, he added.
“The chances of a soft landing are likely to diminish” because monetary policy needs to be “more restrictive or restrictive for longer”, Powell warned during a press conference following the rate rise announcement.
His remarks followed the publication of a new “dot plot” of Fed officials’ interest rate projections that reinforced the central bank’s commitment to a “higher for longer” approach. The forecast showed the benchmark rate rising to 4.4 per cent by the end of this year before peaking at 4.6 per cent next year.
