The Federal Reserve has lowered interest rates by 0.25 percentage points, adjusting the target rate range to 4.5% to 4.75%. Federal Reserve Chairman Jerome Powell expressed that he is "optimistic" about the economy. He also stated that he would not resign from his position if elected President Donald Trump asked him to.
Author: CNBC
Translation: Blockchain in Plain Language
1. U.S. Fiscal Policy "On an Unsustainable Path"
Powell stated on Thursday that the growing deficit and overall fiscal policy in the U.S. remain headwinds for the economy.
He said, "The federal government's fiscal path, fiscal policy, is on an unsustainable path. Our debt-to-economy ratio is not appropriate, but this path is unsustainable."
Powell added, "We see huge deficits occurring in a fully employed situation, and this is expected to continue, so it must be addressed. Ultimately, this poses a threat to the economy."
— Brian Evans
2. Powell Says He Would Not Resign If Trump Asks Him To
At a press conference on Thursday afternoon, Powell stated that he would not resign from his position as Federal Reserve Chairman even if elected President Donald Trump asked him to.
In response to a reporter's question about whether he would resign if Trump asked him to, Powell replied, "No."
Later, another reporter asked Powell whether the president has the authority to fire or demote him. Powell responded that such actions "are not legally permissible."
— Lisa Kailai Han, Spencer Kimball
3. Powell States Monetary Policy Remains Tight
Despite recent positive economic data and a rise in the stock market on Wednesday, Powell stated that the Federal Reserve is still moving forward with rate cuts as monetary policy remains tight.
Powell emphasized that the Federal Reserve believes lowering borrowing costs is necessary to achieve its "dual mandate" of ensuring maximum employment and price stability.
"We believe that even after today's rate cut, the policy remains tight," Powell told reporters at a press conference following the latest rate hike by the Federal Reserve.
— Jin Heqing
4. Powell Reveals Inflation Report "Slightly Higher Than Expected"
Federal Reserve Chairman Powell stated that although an inflation report was "slightly higher than expected," he is not concerned about the economic outlook.
"Overall, we are optimistic about economic activity," he said. "At the same time, we received an inflation report… it is not bad, but it is indeed slightly higher than expected."
"By December, we will have more data, perhaps an employment report, two more inflation reports, and a lot of other data, and we will make decisions as we approach December," Powell continued.
— Ken Conlon
According to Byron Anderson, head of fixed income at Laffer Tengler Investments, now is the right time for the Federal Reserve to pause rate cuts.
"In the absence of a credit crisis (which there are currently no signs of), the greater risk facing the market is adding stimulus to an already inflation-prone environment," he said. "While many may disagree, this is the perfect time for the Federal Reserve to pause and reassess the situation before the end of the year."
"If you believe the economic fundamentals are solid, then every rate cut increases the risk of inflation," he added.
— Samantha Subin
5. Federal Reserve Chairman Powell Says Policy "Well Prepared" to Address Future Risks
On November 7, 2024, Federal Reserve Chairman Jerome Powell held a press conference after the Federal Open Market Committee meeting on November 6-7 at the William McChesney Martin Building in Washington, D.C.
Andrew Caballero-Reynolds | AFP | Getty Images
Federal Reserve Chairman Powell stated that the central bank will monitor changes in the economy and inflation and adjust policies accordingly.
In prepared remarks at the press conference, Powell stated: "If the economy remains strong and inflation fails to sustainably return to the 2% target, we can loosen policy more slowly. If the labor market unexpectedly weakens, or inflation declines more rapidly than expected, we can act more quickly."
He added, "The policy is well prepared to address the risks and uncertainties we face in executing our dual mandate."
— Sarah Min
Powell States Trump's Election Will Not Affect Federal Reserve's Outlook
Powell stated, "In the short term, the election will not affect our policy decisions." He said, "In principle, any policies of the government or policies passed by Congress may have economic effects over time." He added, "Therefore, along with countless other factors, we will incorporate these economic effect forecasts into our economic models and consider them."
— Jeff Cox
Federal Reserve Chairman Powell States There Is No "Pre-set Path" for the Federal Reserve
Federal Reserve Chairman Powell stated that the U.S. central bank has not made a specific decision regarding further rate cuts in the future.
Powell said at the Thursday afternoon press conference, "When considering additional adjustments to the target range for the federal funds rate, the committee will carefully assess incoming data, evolving outlooks, and risk balances." He said, "We do not have a pre-set path. We will continue to make decisions at each meeting."
— Lisa Kailai Han
Powell States Labor Market's Contribution to Price Growth Is Minimal
Federal Reserve Chairman Powell stated that the labor market is not a major driver of inflation.
Powell said, "The labor market is not a significant source of inflationary pressure."
He noted that employment growth has slowed in recent months, and the unemployment rate has risen compared to a year ago. Overall, he believes the labor market is less tight than before the COVID-19 pandemic but is still considered "robust."
— Alex Harring
6. Federal Reserve Can Proceed with Rate Cuts at a "More Cautious" Pace, Says Bankrate Chief Financial Analyst
Bankrate Chief Financial Analyst Greg McBride stated that the Federal Reserve's rate cut actions are in line with expectations and may continue in a more cautious manner in the future.
He said, "The Federal Reserve continues to ease tightening policies, lowering rates by a quarter of a percentage point as expected. Strong economic growth means the Federal Reserve can abandon the urgency of a half-point rate cut in September and adopt a more cautious pace of rate cuts, with a quarter-point cut likely to persist."
**However, he noted that the recent rise in *Treasury yields* has diminished the effectiveness of the rate cuts.**
McBride added, "In the past seven weeks, mortgage rates have risen from 6.2% to 7%, a significant increase that has a more pronounced impact than the quarter-point reduction in credit card rates."
— Darla Mercado
7. Major Stock Indices Remain Stable After Federal Reserve Announces Expected Rate Cut
After the Federal Reserve announced the anticipated 0.25 percentage point rate cut, the three major stock indices showed little change.
As of 2:10 PM Eastern Time, the S&P 500 was up nearly 0.7%, the Nasdaq Composite was up 1.4%, and the Dow Jones Industrial Average was nearly flat, up about 15 points.
— Darla Mercado
8. Today's Consumer Rates Compared to March 2022
The Federal Reserve is expected to lower rates by a quarter of a percentage point on Thursday, taking another step to unwind tightening policies.
Since the Federal Reserve began raising rates in March 2022, consumer rates have changed significantly. In certain areas of the market, rates have slightly cooled since the Federal Reserve's first half-point rate cut in September.
According to Bankrate, as of the week ending November 1, the rate for a $30,000 home equity line of credit was 8.7%. This is down from 9.25% on September 13 but still significantly higher than 4.27% in March 2022.
Credit card rates, according to Bankrate, were 20.5% as of last week, well above 16.34% in March 2022. However, this is a decrease from last month's 20.78%.
The rate for a 30-year fixed mortgage was 7.09% for the week ending November 1, significantly higher than 4.29% in March 2022. However, this rate is also higher than the week of September 13, when the rate was 6.12%.
This is because mortgage rates are closely related to the yield on the 10-year U.S. Treasury, which has recently risen. In fact, the benchmark yield for the week ending November 1 was 4.363%, significantly higher than 3.649% in mid-September.
— Darla Mercado, Nick Wells
9. Market Sees Greater Likelihood That Federal Reserve Will Skip Rate Cuts in December
Traders were confident that a rate cut decision would be made ahead of Thursday's Federal Reserve meeting, but their confidence in the outlook for December has gradually weakened.
The federal funds futures market shows a 100% probability that policymakers will cut rates, with a very low chance of a half-point cut in September. According to CME Group's FedWatch tracker, the implied probability in the market is 99% that the Federal Reserve will cut rates by a quarter of a percentage point.
For December, the probability of pausing rate hikes is rising, reaching 32.6% by noon on Thursday, an increase of about 8 percentage points from a week ago. If the Federal Reserve does not skip December, CME data shows that the likelihood of a rate cut in January is about 68%.
— Jeff Cox
Article link: https://www.hellobtc.com/kp/du/11/5520.html
Source: https://www.cnbc.com/2024/11/07/fed-meeting-live-updates-traders-anticipate-november-rate-cut.html
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
