Jerome Powell - Monetary Policy and Price Stability
https://www.federalreserve.gov/newsevents/speech/files/powell20220826a.pdf
Restoring price stability will take some time and requires using our tools forcefully to bring demand and supply into better balance. Reducing inflation is likely to require a sustained period of below-trend growth. Moreover, there will very likely be some softening of labor market conditions. While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses. These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.
https://www.federalreserve.gov/newsevents/speech/files/powell20220826a.pdf
Restoring price stability will take some time and requires using our tools forcefully to bring demand and supply into better balance. Reducing inflation is likely to require a sustained period of below-trend growth. Moreover, there will very likely be some softening of labor market conditions. While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses. These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.
Dow drops 1,008 after Fed's Powell says rates will stay high
https://www.washingtonpost.com/business/asian-stocks-follow-wall-st-higher-ahead-of-fed-chair-speech/2022/08/26/9a51a302-250a-11ed-a72f-1e7149072fbc_story.html
https://www.washingtonpost.com/business/asian-stocks-follow-wall-st-higher-ahead-of-fed-chair-speech/2022/08/26/9a51a302-250a-11ed-a72f-1e7149072fbc_story.html
‘There’s no Fed pivot’: Wall Street finally gets
the message as stocks swoon after Powell speech
https://www.marketwatch.com/story/wall-street-reacts-stocks-drop-as-feds-powell-warns-of-pain-ahead-vows-to-keep-at-it-until-inflation-wanes-11661528073
https://www.marketwatch.com/story/wall-street-reacts-stocks-drop-as-feds-powell-warns-of-pain-ahead-vows-to-keep-at-it-until-inflation-wanes-11661528073
MY WARNING FROM AUGUST 2:
Are investors right in expecting a dovish Fed pivot? BY VIVEKANAND JAYAKUMAR | The Hill, 08/02/22 https://thehill.com/opinion/finance/3582559-are-investors-right-in-expecting-a-dovish-fed-pivot/
“Since inflation is expected to remain well above the 2 percent target level for quite a while, the central bank has to forcefully persuade investors that rate cuts will not be forthcoming anytime soon. ...
If investors are indeed misreading the Fed’s commitment to maintaining a tight policy for a prolonged period and are failing to adequately take into account future inflation risks, then recent stock and bond market rallies may well prove to be premature and even counterproductive”.