The speech by Jerome Powell, the head of the US Federal Reserve (Fed), at the Economic Club of Washington on Tuesday saw the stock market rise. The US-China trade balance reached a record high of $27 billion in 2022, despite the deterioration of their diplomatic relations. In the UK, the FTSE 100 share index is heading back towards last Friday’s record high, as hopes build that the country’s economy could avoid a recession.
Fed’s Powell: Disinflation, rate rises likely to continue
Jerome Powell stated that inflation is starting to fall, but that it will take a while. Powell noted that “the disinflationary process, the process of getting inflation down, has begun and it’s begun in the goods sector, which is about a quarter of our economy. It has a long way yet to go. These are the very early stages.”
Commenting on interest rates, the Fed’s head said that if inflation runs hotter than the central bank expects, further rate hikes should be discussed. “The reality is we’re going to react to the data. If we keep getting strong labor market reports or higher inflation reports it could be that we need to do more and raise rates than what is priced.
