Federal Reserve chairman Jerome Powell said the time for moderating the pace of rate increases may come as soon as the December 13-14 policy meeting.said Powell did not have to give this speech and “in a narrow sense, Powell’s message is a bit anticlimactic”.
Stanley, however, said: “Economists, fed funds futures, and Fed officials all largely agree that the policy rate is likely to peak in the neighbourhood of 5 per cent. The divergence is that market participants are still sticking with the ‘Fed pivot’ concept that the Fed will begin easing shortly after halting their hikes.
“A number of Fed officials have been explicit that they are highly doubtful that there will be easing in 2023, but, for now, markets are not buying the concept that the FOMC will remain on hold ‘for some time’. Powell will probably need to repeat this argument dozens of times before market participants eager for lower rates buy in.”consistent for at least a few months.
writes on monetary policy, equities, commodities and currencies. He is the overnight markets editor and writes Before the Bell.