As expected, the FED left interest rates constant. In the statement published after the decision, it was stated that there have been deficiencies in reaching the 2% inflation target in the recent period.
Now, FED President Jerome Powell's press conference, which started at 21:30 Turkey time (UTC+3), is being followed closely.
As Bitcoinsistemi.com, we are bringing you this conversation live. You can access Jerome Powell's latest remarks by refreshing the page. You can also find the official live broadcast link right below.
- Inflation fell significantly last year but remains very high.
- Further progress on inflation is not guaranteed; The path is unclear.
- We are extremely careful about inflation risks.
- The restrictive policy stance put downward pressure on inflation and the economy.
- Risks to achieving bilateral goals have become better balanced in the past year.
- The labor market remains relatively tight.
- Nominal wage growth has decreased over the past year, but labor demand still exceeds supply.
- This year's inflation data was higher than expected.
- Our policy actions are guided by our goals.
- FED officials are 'very aware' of the challenges posed by high inflation.
- But long-term inflation expectations remain well anchored.
- We do not think it would be appropriate to cut interest rates until we have greater confidence that inflation will return to 2%.
- Gaining greater confidence is likely to take longer than previously expected.
- Lowering policy too soon or too much, or too late or too little, both have risks.
- Inflation data so far this year have not given us any more confidence.
- Politics is well positioned to deal with the risks and uncertainties we face.
- We will make our decisions separately for each meeting.
- The policy rate is at a restrictive level.
- We believe it will be restrictive enough over time.
- We believe that over time the policy is restrictive enough to reduce inflation to 2%.
- The next policy move is unlikely to be a rate hike.
- We are focused on how long to keep the policy restrictive.
- To raise rates, we need to see evidence that the policy is not enough to bring inflation back to our target.
- We think policy is well placed to consider the different paths the economy can take.
- If inflation is more persistent and the labor market remains strong, it may be appropriate to postpone interest rate cuts.
- But there are other avenues that point to a rate cut, but these would only come if we gain more confidence and there is an unexpected weakening in the labor market.
- There is no obvious link between easing financial conditions and inflation.
- I'm not ruling out that we could still have strong growth or that the labor market and inflation could continue to fall.
- It is unlikely that the next move will be a rate hike.
- To meet the inflation target, we will likely need to see wage growth slow to more sustainable levels.
- I don't know how long it will take us to lower interest rates.
- Powell: (when asked about 3 interest rate cuts this year) said only that the FED needs more confidence on inflation and does not see progress in Q1.
- We need to take a cue from three worse-than-expected inflation data.
- Once we gain confidence about inflation, interest rate cuts will be within scope.
- The indication we are getting is that it will take longer to get on a sustainable path towards 2% inflation.
- My expectation is that inflation will decline again this year.
- My confidence that inflation will decline again is lower than before.
- Question: Has the possibility of a rate cut decreased this year? Powell: I don't have a probability estimate. We need to be more confident, our confidence did not increase in the first quarter, on the contrary it will last longer than expected.
- I don't know if inflation will drop enough to merit interest rate cuts.
- I'm not sure whether there will be a rate cut this year or not.
- In light of the data we have, I really don't understand where the talk of a stagflation scenario comes from.
- I don't see stagflation related to growth or inflation.
- 3% inflation does not satisfy us.
- Restrictive monetary policy needs more time to fulfill its duty.
- We have peace of mind that we will do what we think is right, when we think it is right.
- We've seen pretty consistent progress in slowing wage growth, but it's been bumpy.
- It will take some time, but we will reduce inflation to 2%.
Bitcoin (BTC) price rebounded modestly in the minutes since the news broke, but remains under pressure, falling more than 4% to $58,000 in 24 hours.
Markets entered 2024 expecting a long series of interest rate cuts from the Federal Reserve, but those hopes have faded sharply over the past few weeks as the economy continues to strengthen and inflation rose slightly in the first four months of the year. According to the CME FedWatch tool, markets (prior to today's Fed decision) were pricing the probability of a zero rate cut this year at around 25%. A month ago, the probability that the FED would not cut interest rates in 2024 was only 1%.
However, following the decision, many investors predict that the FED will make the only interest rate cut this year in November.
*This is not investment advice.