Following the crucial decision of the Federal Reserve to raise interest rates by another 25 basis points, Fed Chairman Jerome Powell says officials “see no rate cuts this year.” In addition, the statements follow Powell’s assured commitment to inflation to meet the Fed’s 2% target.
Conversely, Powell spoke after Federal Reserve meetings pointing to another rate hike. There he dealt with the burgeoning banking crisis and ensured the safety of the banking sector.
Powell does not expect rate cuts
Today marks one year since the Federal Reserve first started battling rising inflation. Subsequently, a plethora of rate hikes resulted from that mission, the latest of which arrives today.
The Fed faced what was their most pivotal meeting in ages as they debated whether or not to continue with the hikes. In particular, there is uncertainty about what would put more strain on the banking system as a result of a burgeoning banking crisis that began with the collapse of Silicon Valley Bank a few weeks ago.
Now, not only has the Federal Reserve continued its rate hikes, but Fed Chairman Jerome Powell says officials are “not seeing rate cuts this year.” Conversely, Powell reaffirmed the commitment to meet the Fed’s 2% inflation target while assuring the US that “the banking system is safe,” in subsequent quotes.
How the market will react to the decision will be extremely interesting as the banking industry is still reeling. Consequently, with news of no interest rate cuts in sight, the next developments in many of the country’s financial sectors become even more intriguing.