Summary of Key Points from Powell's Speech on December 4

Wallstreetcn
2024.12.04 23:49

  1. Monetary Policy
    Over time, the Federal Reserve will move towards a more neutral interest rate. Although downside risks are lower than expected, the Federal Reserve can remain patient and cautiously move towards a neutral rate.

  2. Independence
    Independence gives us the ability to make the best decisions. There is broad support in Congress for the independence of the Federal Reserve.
    It is expected that (I/the Federal Reserve) will maintain a good relationship with the government formed by the elected overall Trump in the future.

  3. Inflation
    The inflation target has still not been achieved, but progress is being made. The rising price levels are causing dissatisfaction among people.

  4. Employment
    U.S. employment numbers are good, but the low-income class is under pressure.

  5. Trump Tariff Risks
    It is unclear how large the scale of Trump's tariffs will be, when they will be implemented, and how long they will last.
    Trump's tariff ideas have not yet materialized, and the Federal Reserve cannot formulate corresponding policies.
    We are modeling, monitoring, and assessing the tariff ideas.
    The Federal Reserve has no independent views on immigration issues and tariff ideas.

  6. Financial Stability
    The U.S. Treasury is responsible for the value of the dollar (as a reserve currency).
    The Federal Reserve is concerned about the relationship between cryptocurrencies and the banking system.

  7. Debt Sustainability and Fiscal Policy
    U.S. debt is on an unsustainable path.
    The Federal Reserve has never discussed the federal government's debt level when formulating FOMC monetary policy.
    We clearly delineate our fiscal functions from those of the Treasury

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