Powell Refuses to Call Fed 'Standing Still': Market Has Long Since Priced In

BlockBeats News, July 30th, Federal Reserve Chairman Powell stated that since the June meeting, the financial market has already felt the majority of the Fed's tightening effects, so he does not agree with describing the decision to maintain interest rates as a "pause" this time.

Powell said, "I wouldn't call today's decision a 'pause' in any sense. If you must label it as a 'pause,' then the performance of the financial market actually indicates the opposite."

Since the Fed's mid-June interest rate meeting, the yields on the U.S. 2-year and 10-year Treasury bonds have both risen by about 20 basis points. Powell pointed out that during this period, the financial market did not "pause" in its adjustments but instead continuously repriced based on inflation data and economic growth performance: on one hand, inflation data influenced market expectations; on the other hand, strong economic growth pushed both nominal and real interest rates higher.

He stated, "Today, the Fed did not explicitly adjust the policy rate, that's true. But I believe this is only the beginning of the entire policy story, not the end." (FXStreet)