Federal Reserve Chairman Jerome Powell’s speech at the virtually-held Jackson Hole symposium left Wall Street cheering the idea that rate hikes were still well off on the horizon.
Market watchers had circled Friday’s speech as one that could potentially set the course for the Fed to announce it was scaling back its asset purchases and planning to hike interest rates.
Instead, they were given a lackluster assessment of when the central bank’s liftoff may begin.
“We have said that we will continue to hold the target range for the federal funds rate at its current level until the economy reaches conditions consistent with maximum employment, and inflation has reached 2 percent and is on track to moderately exceed 2 percent for some time,” Powell said on Friday. “We have much ground to cover to reach maximum employment, and time will tell whether we have reached 2 percent inflation on a sustainable basis.”
The Federal Reserve at the start of the pandemic slashed interest rates to near zero and pledged to buy an unlimited amount of assets in order to cushion the U.S. economy amid its sharpest slowdown of the post-World War 2 era.
