Federal Reserve Chairman Jerome Powell said: "It's not time to start talking about cuts yet." "We will let the public know in advance." "We had a great job report, but starting talking about the cuts isn't enough, we'll need to see more data." This brought goldspot up by nearly 0.5%, trading at the end of session around $ 1781 / oz.
☘️With the central bank keeping interest rates close to zero, the financial market's focus is on the U.S. Treasury Department's $ 120 billion-monthly asset buying rate, and buying agencies. Fed's mortgage-backed securities. But the Fed chairman officially said that they will not slow down asset purchase until realizing "more significant progress" in the economic recovery process.
☘️In March, the US economy had the best job growth since August of last year, with 916,000 jobs created, significantly beating the previous expectation of around 652,000.
☘️ The head of central bank also spends a lot of time talking about inflation. Powell once again reiterated, inflationary pressure may be temporary, and the Fed will be ready to act if something goes wrong, he said. "The recent hikes are likely to have only a temporary impact on inflation."
☘️Added that it is unlikely that inflation will rise persistently while the labor market is in a serious decline.
☘️Powell also points to the major differences between the present and the 1960s and 1970s, when it comes to inflation: "We experience an unprecedented series of problems. These price pressures are related to the process. reopening. This is not the same as inflation that is steadily increasing year on year, our target is 2% inflation. " Thus, there are two main causes of temporary inflation in the short term: the fundamental effect, the transient effect, and congestion, which is a temporary blockage in the supply chain.
☘️Powell also doesn't forget to remind markets that the Fed knows its work and is ready to act if inflation moves beyond 2%. "We have seen inflation below 2% in recent years, and have actively used our tools to get back to 2%. If we see inflation rising physically," he said. we will use our tools to bring it down to 2%. But this is not what we expected "
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