After the Fed's decision to keep interest rates constant, Fed Chairman Jerome Powell speaks live.
We are relaying Powell's speech to you, the news will be updated as details come.
Here are excerpts from Powell's speech:
- We are strongly tied to 2% inflation.
- Almost all policy makers are considering a few additional rate hikes this year.
- The full effects of our tightening are yet to be felt.
- Without price stability, nothing good happens in the economy for anyone.
- Some signs indicate that supply and demand have come into balance in the labor market. But the demand for labor still significantly exceeds the supply of workers.
- Inflation has calmed down a bit. However, inflation pressures remain high.
- We have a long road ahead of us to bring inflation back to the 2 percent target.
- We see the effects of our policy tightening in housing prices and investments.
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At this meeting, we decided that it would be a good idea to keep the rates constant, considering that we were moving quickly in the rate hike.
- We will continue to make our decisions from meeting to meeting, taking into account the economic data.
- We take all the steps for the citizens.
- As we approached the end of the road, we decided to slow down a bit.
- There was no discussion about what might happen at the next meetings. It is a decision taken according to the data in the last meeting that there may be more interest rate hikes.
Bitcoin's reaction after Powell's speech:
The Fed's chain of aggressive interest rate hikes was among the numerous causes of the Bitcoin bear market. By late 2021, the BTC price had slumped from its all-time high of $69,000 to the current level of $26,000. One of the bull scenarios for Bitcoin in 2023 and beyond is that the central bank may be pulling its foot off the monetary brake.
Alongside the rate decision, the Fed has released its latest quarterly economic forecasts, with members projecting a final funds rate of 5.6% in 2023, compared to the 5.1% expected in March. The final funding rate projected to be 4.6% at the end of 2024 is lower than the 4.3% projected in March.
In the statement made by the institution regarding the interest rate decision, it was stated, "Keeping the target range fixed at this meeting allows the committee to evaluate additional information." Officials unanimously approved the rate decision.
After keeping interest rates close to zero following the Covid epidemic, the FED had increased the interest rate by a total of 5 percentage points in every meeting since March 2022, the fastest increase since the 1980s. Authorities have slowed their increases this year, raising interest rates by a quarter point in the last three meetings, most recently in May.
*Not investment advice.