Jay Powell won't give in to the market's biggest fear: Morning Brief

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Jerome Powell News

Interest Rates,Federal Reserve,Unemployment Rate

As interest rate cuts get pushed into the future, investors fear potential rate hikes. Fed Chair Jerome Powell, however, appears not to share these worries.

, holding the fed funds rate at a 23-year high between 5.25%-5.50% amid a "lack of further progress" bringing inflation back to its 2% target.

Pressed by Yahoo Finance's Jennifer Schonberger on whether, say, a rise in the unemployment rate above 4% would constitute an unexpected softening, Powell said a "couple of tenths in the unemployment rate would probably not do that." As Renaissance Macro's Neil Dutta wrote: "Powell believes that policy is restrictive. If policy is restrictive, they are more concerned about downside growth risks than upside inflation risks."

Powell's prepared remarks on Wednesday no longer included language suggesting it would be appropriate "at some point" this year to cut rates. A notable in the close-reading world of Fedspeak.As Wells Fargo economist Jay Bryson wrote Wednesday, "recent data appear to have pushed the FOMC away from the precipice of rate cuts but still very comfortable with a wait and see approach.

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