The long-awaited text of Powell’s speech has just been released. At press time the Fed Chair is delivering his speech. Below we present key bullet points:
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It could be appropriate to begin tapering this year
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Tapering doesn’t carry direct rate-hike timing signal
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What the Fed does with bond purchases has nothing to do with the timing of rate hikes
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Inflation has reached the threshold that allows the tapering process to begin
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Clear progress on job-market recovery has been noticed by the Fed
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The speed with which we’ve recovered has beyond our expectations
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The unemployment rate is still too high, and it exaggerates the state of the labor market recovery
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The Federal Reserve expects to see additional progress on the job market recovery in the coming months
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Monetary policy is still “ideally positioned” to help the economy recover
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The Fed will keep an eye on developments with the delta coronavirus variant.
To wrap things up: The Fed hasn’t announced QE tapering, but hinted that it could be launched this year. Also, the Fed still clearly ignores elevated inflation, saying that it should be 'transitory'.
US stock indices hit fresh all-time highs while the US dollar slumped. Gold and silver prices jumped after Powell's remarks.
EURUSD jumped to 1.18 during Powell's speech. The USD tanked across the board. Source: xStation5
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