Powell 'certainly' intends to stay at Fed until chairmanship ends

Published On Nov 14, 2024, 4:22 PM

Federal Reserve Chairman Jay Powell reaffirmed his intention to complete his term, which ends in May 2026. During a recent appearance, Powell emphasized that the Fed is not rushing to lower interest rates, citing strong economic conditions. He indicated that the central bank is closely monitoring inflation and will approach future rate decisions carefully. Recent inflation data, including the core Consumer Price Index and Producer Price Index, show limited progress towards the Fed's 2% inflation target, although a rate cut is expected in December. Powell also chose not to speculate on potential changes in policy depending on upcoming government proposals.

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Stock Forecasts

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Positive

Given Powell's comments indicating a cautious approach to rate cuts and the central bank's careful monitoring of inflation, the prospects for interest rate-sensitive stocks may improve if rates are cut moderately in December. However, tight inflation conditions might also create market volatility leading to stronger defensive positions in sectors like utilities and consumer staples.

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Negative

In light of Powell's confirmation of strong economic performance and a careful rate approach, financial sector stocks may face headwinds if rate cuts continue. Reduced margins could weigh on bank profitability even as they support broader market stability.

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