© Reuters.
Investing.com – After one day yesterday regarding the possibility of a higher than expected rate, Jerome Powell has now reaffirmed the move towards continuing the mission of returning inflation towards 2%, as well as confirming that no decision on the rate will be made at the next meeting.
Powell confirmed a while ago that in the next meeting, and that what will determine this percentage is the upcoming data. Confirming that the final interest rate may be higher than expected.
“We have specific goals, which are restoring price stability and making optimal use of the labor market,” according to Powell. He stressed, “If the economic data requires a further rate hike, we will do so.”
He added: Inflationary pressures were higher than expected, especially since January data was strong in terms of the labor market, employment and consumer expenditures. Pointing out that there is still a long way to go to reduce inflation, and the road is likely to be difficult.
He continued: We see the consequences of the Fed’s decisions, but it takes some time to return inflation to the required target.
Powell also noted that no one should think that the Federal Reserve can protect the economy in the event of a debt default.
Higher than expected .. and important data
The Fed chief reiterated his message from Tuesday that the US central bank is likely to raise interest rates higher than previously expected and that it could move at a faster pace if strong economic data continues to emerge.
“We’ve got some potentially important data coming,” he said, referring to the latest reading on US employment opportunities, which was released as the certification began on Wednesday, in addition to February’s due Friday and March 14 release.
He stressed, “We will be ready to increase the pace of raising interest rates if this data does not come against the desire of the Fed.”
A look at the data released recently:
The US JOLTs job opportunities data was released, and the US market provided 10.824 million job opportunities, while experts expected 10.5 million job opportunities to be available in February.
Previous readings were revised up to 11.234 million jobs for the month of January.
Job opportunity data is of great importance as it is an indicator of the state of the US labor market and its ability to keep up with the interest rate hike. Jerome Powell uses US job opportunities a lot when talking about the strength of the US market.
Employment Report for ADP
And it was positive, which motivates the Fed towards tightening in the future. Where the report stated that 242 thousand jobs were added for the month of February, while experts expected the addition of 200 thousand jobs, and the January reading was revised to record 119 thousand, after it was only 106 thousand.
This indicator determines the change in the level of those hired during the past month, with the exception of those hired in the agricultural sector. This indicator is published two days before the publication of the ADP Employment Report of the Official Bureau of Human Resources Statistics, which provides solutions in the field of employment for companies. Since its release in 2007, it has proven to be a good indicator for predicting the employment report.
Dollar and gold now
It has now fallen slightly towards 105.55 levels, down by 0.05%.
Spot contracts recorded levels of $1,820 an ounce, up by 0.4%.
While it recorded levels of 1825 dollars an ounce, up by about 0.2%.
