Federal Reserve Chairman Jerome Powell has repeatedly expressed his promise to stay with the central bank’s stance on current monetary policy despite concerns over rising inflation continue to put pressure on the market.
The 10 -year U.S. treasury yield, which showed a significant increase since the end of last year, signaled concerns that large government spending would push inflation above central bank targets faster than expected.
Even so, Powell refrained from using his power by simply saying that significant changes in the bond market ‘caught my eye’, and stressed the central bank would not change its stance on its policy.
He also added that the current interest rate will remain until the full employment target and 2% inflation of the central bank can be achieved.
This has pushed 10 -year U.S. bond yields soaring above 1.5%, making the U.S. dollar trade higher and the stock market slump lower.
The question now is, until when will the market have to suffer because of Powell's view?
This is likely to continue until at least March 18, which is when the next FOMC policy meeting will be held. At that time, Powell and other policymakers will assess market movements as well as decide whether they need to change the direction of monetary policy.
Will banks increase bond purchases in excess of $ 120 billion a month. Powell may say ‘no’ now, but will his stance remain the same at the next policy meeting?
