Jerome Powell Speaks at Riksbank Event

Daddy Jerome Powell emphasized the need for the Federal Reserve to be free of political influence while it tries to tackle inflation. Powell further noted that stabilizing prices requires tough decision-making that can be politically unpopular.

Jerome had this to say:

“Price stability is the bedrock of a healthy economy and provides the public with immeasurable benefits over time. But restoring price stability when inflation is high can require measures that are not popular in the short term as we raise interest rates to slow the economy.”

The chairman said in prepared remarks. He further added:

“The case for monetary policy independence lies in the benefits of insulating monetary policy decisions from short-term political considerations .”

During a recent speech, Federal Reserve Chairman Jerome Powell addressed various topics related to the economy's future. However, he did not explicitly indicate the Federal Reserve's policy outlook. The Fed's next policy meeting is scheduled at the end of this month, with the following policy announcement set for February 1st.

Investors and analysts have been closely watching for clues about the Federal Reserve's future policy moves. They are anticipating a high probability that the Fed will raise interest rates by another 25 basis points. However, this expectation could be influenced by the upcoming Consumer Price Index (CPI) due on January 12th. If the CPI report shows higher-than-expected inflation, the probability of a 50 basis point rate hike would also increase.