Federal Reserve Chairman Jerome Powell tempered expectations that the Federal Reserve would soon begin lowering interest rates, as he seeks more evidence that inflation in the United States is continuing to slow down. The Federal Reserve also maintained borrowing costs at their highest levels in 23 years after its recent policy meeting, but abandoned the previous language that hinted at the possibility of additional interest rate hikes. U.S. stocks declined after the meeting, while investors prepared for a new set of earnings from technology giants Apple, Amazon.com, and Meta platforms, where massive technology stocks are expected to reveal their latest quarterly figures after Thursday’s closing bell, impacting the Nasdaq index.
In a press conference on Wednesday, Powell indicated that the reduction in March was not among his primary choices despite signs of slowing inflation. Instead, Powell and other officials at the Federal Reserve stated that they want to gain “greater confidence” that price growth is indeed declining before considering reducing borrowing costs.
The official statement issued by the Federal Reserve also stated that risks arising from full employment and declining inflation are “moving towards a better balance,” while any mention of “additional policy tightening” was completely removed. Many interpreted this language to mean that the world’s most influential central bank has finally halted a strict tightening cycle that led to raising interest rates to their highest levels in over two decades.
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Shady Fouad is a technical analyst at LDN Company
Shady's strategic vision in the currency markets is reinforced by more than fifteen years of trading experience, which enables him to blend economic and technical analyzes with high efficiency, and find the best investment ideas for traders.
