Official portrait of Governor Jerome H. Powell. Mr. Powell took office on May 25, 2012, to fill an unexpired term ending January 31, 2014. For more information, visit http://www.federalreserve.gov/aboutthefed/bios/board/powell.htm
If last year’s drop in the stock market scared you now you know that it scared Jerome Powell and the Federal Reserve too, because yesterday they cried uncle on further interest rate hikes saying that they are now going to have to wait and see the economy pick up more steam before considering more of them.
“In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes,” the FOMC statement released Wednesday said.
But there was more!
Along with not being able to hike rates the Fed also talked about ending its QT program sooner than expected and even possibly going back to QE one day too!
In a second statement along with the normal FOMC statement the Fed wrote, “the Committee continues to view changes in the target range for the federal funds rate as its primary means of adjusting the stance of monetary policy. The Committee is prepared to adjust any of the details for completing balance sheet normalization in light of economic and financial developments. Moreover, the Committee would be prepared to use its full range of tools, including altering the size and composition of its balance sheet, if future economic conditions were to warrant a more accommodative monetary policy than can be achieved solely by reducing the federal funds rate.”
Gold of course went up on this news and is now positioned to go up as a safe haven alternative to US debt and the dollar. I talked about the implications of all of this in this video:
