An examination of price action in major markets before, during and after

A summary of Fed Chairman Powell’s comments

Federal Reserve Policy and Regulatory Framework:

• Powell stressed the importance of completing the Basel 3 process, highlighting it as a key regulatory priority for the Federal Reserve. The Fed remains committed to completing the final phase of Basel 3, although no specific policy or process decisions have yet been made.

Interest rates and monetary policy:

• The Federal Reserve is taking a cautious and patient approach to any potential rate cuts. Powell pointed out that important economic markers, such as a significant increase in unemployment or persistent inflation trends, would be necessary triggers for considering rate adjustments. He noted that while some global peers may consider rate cuts due to slowing growth, U.S. economic strength has the luxury of patience.

Inflation and economic growth:

• Powell remains optimistic that inflation can be managed sustainably without causing disruption to the labor market. He acknowledged the challenges of meeting the Fed’s 2% inflation target, attributing current inflationary pressures in part to wage increases outpacing productivity. Despite recent progress, Powell said inflation remains above the desired level and the path to reducing it is uncertain and likely longer than expected.

Labor market:

• The state of the labor market is a crucial factor in the Fed’s policy decisions. Powell expressed confidence that inflation could be reduced without significant upheaval in the labor market. He also highlighted continued tensions in the labor market, with nominal wage growth weakening but still posing potential inflationary risks.

Political influence:

• Powell explicitly stated that upcoming elections and political events do not influence the Fed’s policy decisions. The focus remains strictly on economic indicators and maintaining the dual mandate of controlling inflation and maintaining employment.

Political position and future outlook:

• The Federal Reserve plans to maintain tight monetary policy for as long as necessary to bring inflation back to its target. Decision-making will continue to be data-driven, focusing on new economic information and its implications for inflation and growth. Powell reiterated the Fed’s commitment to its long-term goals, emphasizing the importance of not prematurely adjusting policy based on fluctuating economic signals.

Overall economic conditions:

• Powell noted the difficulty of forecasting economic conditions, recognizing the unexpected persistence of some inflationary pressures and the unpredictability of productivity trends. It remains committed to adjusting policies as more data becomes available, with a careful balance to avoid disrupting financial markets or economic stability.

On the stairs :

US stocks rose throughout the decision until the end of the press conference, but fell back after the press conference:

• The Dow industrial average rose 460.62 points compared to a gain of 120.36 points just before the decision. Current price is up 275 points
• S&P index at 50.37 points compared to -11.64 points just before the decision. Current prices up 14.99 points
• NASDAQ index at 239.91 points against -37.37 points just before the decision. Current prices up 79 points

US yields fall from start to finish and are slightly higher after the release. :

• 4.964%, -8.2 basis points compared to 5.0206% just before the decision. The current yield is 4.953%.
• 4.649%, -7.3 basis points compared to 4.697% just before the decision. The current yield is 4.646%.
• 4.630%, -5.4 basis points compared to 4.651%, just before the decision. The current yield is 4.6 to 8%
• 4.744%, -4.5 basis points compared to 4.744%, just before the decision. Current yield is 4.746%

On Forex:

• EURUSD moved higher (USD lower) for most of its talk, but once it reached the upper swing zone between 1.0722 and 1.07346, sellers entered and pushed the price towards the 1.0700 level and the 100 hour and 200 hour moving average. average between 1.06908 and 1.07024.