Skip to main

Jerome Powell Press Conference Highlights

Powell addressed the Fed’s decision to raise interest rates amid banking crisis. Here’s a dive into the key points he said during today’s press conference

The U.S. central bank raised interest rates by a quarter-point, the ninth increase in a year, as it balances the long-running fight against inflation with the sudden tumult in the banking industry.

The Fed move matched last month’s increase in size, lifting rates to a range of 4.75 to 5 percent, in one of the most closely watched decisions in years as conflicting forces left investors and economists guessing at what central bankers would do.

Chart of Fed Funds Target Rate, visual from NYT

Here's my highlights that stood out to me from his press conference. What points did you find interesting about it. Share your thoughts about it in the comments below ⬇️

On the Fed Funds Rate & QT:

  • "No longer stating that ongoing rate increases are appropriate to quell inflation."
  • Median rate projection is now 5.1% for the end of 2023, 4.3% for the end of 2024 and 3.1% for the end of 2025.
  • Considered pausing, but there was still a "strong consensus" to hike by 25 bps.
  • "Too soon to determine the total impact" of the recent banking issues and so "too soon to know how monetary policy should address them."
  • Market now pricing in May hike & cuts for rest of year. Powell reiterated base case is not cutting in 2023. 5.1% median projection hints at 0-1 more hikes & then a pause.

On Inflation:

  • Powell finally acknowledged that new leases are being signed at rates that will lead to housing disinflation over the coming months.
  • Services disinflation ex-housing needs to pick up; goods disinflation is material.
  • PCE median expectation of 3.3% by end of 2023 & 2.5% by end of 2024.

On Recent Banking Sector Issues:

  • BTFP "demonstrates commitment to ensure deposits are safe." Banks holding safe & liquid assets can borrow reserves at par. It's meeting "unusual funding needs.'
  • The issues will likely tighten credit conditions & weigh on economic output.
  • QT is continuing (despite recently adding assets to the balance sheet via BTFP).

"SVB failed with taking too much risk and not hedging that risk appropriately. These weaknesses are not at all broad throughout the banking system. This is an outlier." - Powell

The market is getting it wrong by predicting rate cuts this year, says Powell

  • He highlighted the fact that the central bank’s summary of economic projections published Wednesday anticipates slow growth, a gradual decline in inflation and the rebalancing of both supply and demand within the labor market. “In that most likely case, if that happens, participants don’t see rate cuts this year,” he said.
  • Powell added that what lies ahead for the economy may be “uncertain” but rate hikes are not currently in the central bank’s “baseline expectation.”

#powell #fed #interestrates #economy

Own your future.
Build your portfolio.

All of your investing.
All in one place.

Invest in stocks, treasuries, ETFs, crypto, and alternative assets on Public. Transfer your account to Public and get up to $10,000.
Sign Up
Contact Us
Check the background of this firm on FINRA’s BrokerCheck.

© Copyright 2023 Public Holdings, Inc. All Rights Reserved.

Market data powered by Xignite.

Stocks and ETFs.
Brokerage services for US-listed, registered securities are offered to self-directed customers by Open to the Public Investing, Inc. (“Open to the Public Investing”), a registered broker-dealer and member of FINRA & SIPC. Additional information about your broker can be found by clicking here. Open to Public Investing is a wholly-owned subsidiary of Public Holdings, Inc. (“Public Holdings”). This is not an offer, solicitation of an offer, or advice to buy or sell securities or open a brokerage account in any jurisdiction where Open to the Public Investing is not registered. Securities products offered by Open to the Public Investing are not FDIC insured. Apex Clearing Corporation, our clearing firm, has additional insurance coverage in excess of the regular SIPC limits. Additional information can be found here.

Alternative Assets.
Brokerage services for alternative assets available on Public are offered by Dalmore Group, LLC (“Dalmore”), member of FINRA & SIPC. “Alternative assets,” as the term is used at Public, are equity securities that have been issued pursuant to Regulation A of the Securities Act of 1933 (as amended) (“Regulation A”). This content is not investment advice. These investments are speculative, involve substantial risks (including illiquidity and loss of principal), and are not FDIC or SIPC insured. Alternative Assets purchased on the Public platform are not held in an Open to the Public Investing brokerage account and are self-custodied by the purchaser. The issuers of these securities may be an affiliate of Public, and Public (or an affiliate) may earn fees when you purchase or sell Alternative Assets. For more information on risks and conflicts of interest, see these disclosures.
An affiliate of Public may be “testing the waters” and considering making an offering of securities under Tier 2 of Regulation A. No money or other consideration is being solicited and, if sent in response, will not be accepted. No offer to buy securities can be accepted, and no part of the purchase price can be received, until an offering statement filed with the SEC has been qualified by the SEC. Any such offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time before notice of acceptance given after the date of qualification by the SEC or as stated in the offering materials relating to an investment opportunity, as applicable. An indication of interest to purchase securities involves no obligation or commitment of any kind.

Cryptocurrency execution and custody services are provided by Apex Crypto LLC (NMLS ID 1828849) through a software licensing agreement between Apex Crypto LLC and Public Crypto LLC. Apex Crypto is not a registered broker-dealer or a member of SIPC or FINRA. Cryptocurrencies are not securities and are not FDIC or SIPC insured. Apex Crypto is licensed to engage in virtual currency business activity by the New York State Department of Financial Services. Please ensure that you fully understand the risks involved before trading: Legal Disclosures, Apex Crypto.

U.S. Treasuries (“T-Bill“) investing services on the Public Platform are offered by Jiko Securities, Inc. (“JSI”), a registered broker-dealer and member of FINRA & SIPC. See JSI’s FINRA BrokerCheck and Form CRS for further information. When you enable T-Bill investing on the Public platform, you open a separate brokerage account with JSI (the “Treasury Account“).

JSI uses funds from your Treasury Account to purchase T-bills in increments of $100 “par value” (the T-bill’s value at maturity). T-bills are purchased at a discount to the par value and the T-bill’s yield represents the difference in price between the “par value” and the “discount price.” Aggregate funds in your Treasury Account in excess of the T-bill purchases will remain in your Treasury Account as cash. The value of T-bills fluctuate and investors may receive more or less than their original investments if sold prior to maturity. T-bills are subject to price change and availability - yield is subject to change. Past performance is not indicative of future performance. Investments in T-bills involve a variety of risks, including credit risk, interest rate risk, and liquidity risk. As a general rule, the price of a T-bills moves inversely to changes in interest rates. See Jiko U.S. Treasuries Risk Disclosures for further details.

Investments in T-bills: Not FDIC Insured; No Bank Guarantee; May Lose Value.Banking services and bank accounts are offered by Jiko Bank, a division of Mid-Central National Bank, Member FDIC. Such banking services and accounts are subject to transaction dollar amount and/or frequency limitations set forth in the Jiko Bank Account Limitations Disclosures.

JSI and Jiko Bank are not affiliated with Public Holdings, Inc. (“Public”) or any of its subsidiaries. None of these entities provide legal, tax, or accounting advice. You should consult your legal, tax, or financial advisors before making any financial decisions. This material is not intended as a recommendation, offer, or solicitation to purchase or sell securities, open a brokerage account, or engage in any investment strategy.

Commission-free trading of stocks and ETFs refers to $0 commissions for Open to the Public Investing self-directed individual cash brokerage accounts that trade the U.S.-listed, registered securities electronically during the Regular Trading Hours. Keep in mind that other fees such as regulatory fees, Premium subscription fees, commissions on trades during extended trading hours, wire transfer fees, and paper statement fees may apply to your brokerage account. Please see Open to the Public Investing’s Fee Schedule to learn more.

Fractional shares are illiquid outside of Public and not transferable. For a complete explanation of conditions, restrictions and limitations associated with fractional shares, see our Fractional Share Disclosure to learn more.

All investments involve the risk of loss and the past performance of a security or a financial product does not guarantee future results or returns.