Image: Rosy Ko / Unsplash

Jerome H. Powell,

Chairman of the Federal Reserve , discussed the central bank 's commitment to cautious interest rate moves in his speech before the Economic Club of New York last Thursday. He emphasized the need to balance controlling inflation with sustaining the economy. However, this balance has become more complex as the US economy continues to surprise and geopolitical conflicts enter the picture.

What is the Interest Rate in the USA?

Over the past 19 months, the Fed has raised interest rates to 5.25% to 5.5%, aiming to reduce economic activity and control inflation. However, economic growth remains resilient, with consumer spending and business hiring underway, a fact that surprised Jerome H. Powell.

What's Powell's Surprise?

Powell acknowledged that the recent growth data came as a surprise to the team as well, as consumer demand exceeded expectations. As the Fed monitors robust economic growth and demand for labor, it considers the possibility that tightening monetary policy may be necessary to control inflation .

What to Expect from the Next Fed Meeting?

Despite this analysis, the expectation is that the Fed will not change interest rates at the next meeting scheduled for November. However, this caution could indicate that the central bank is preparing the ground for a future adjustment ( Soft Landing ), scheduled for the December 14th meeting. The economy continues to be an ever-changing challenge for the Fed , and conflicts bring inflationary pressures, making its job of maintaining financial stability more difficult.

How could news like this impact my investments? Alternatively, how can I gain from this information? Contact the analyst .