The Fed has a dual mandate mandated by Congress to pursue monetary policy that encourages price stability and maximum employment. Inflation is more than double the central bank’s target, while unemployment is close to its pre-pandemic level.
Other of the most prominent questions were in relation to the rate hike: the official pointed out that “if it is necessary to raise rates for a longer time, we will do so.”
The market began to speculate on at least four rate hikes this year, after last week’s release of the minutes of the last Fed meeting revealed an even harsher-than-expected tone on the price hike. At that meeting, in which the end of debt purchases was accelerated to March, it was also suggested that such a withdrawal of stimulus could be even faster before tackling a first rise in interest rates. Investors await that first increase in the price of money in the month of March.
“We will use our monetary policy tools to roll back inflation,” Powell told the Senate. In his speech he referred to the regulations for cryptocurrencies and stated that the institution will have its report on cryptocurrencies ready in the coming weeks.
Powell’s words are causing debt yields to rise, which has continued to accelerate in recent weeks. The yield on the 10-year US bond rises to 1.78%, at highs in January 2020, and the yield on the two-year bond, much more sensitive to expectations of rate hikes, is placed at highs of the last two years, 0.929%.
Source From: Ambito
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