Economics
Powell's ‘Just Below’ Comment Seen as Suggesting Fewer Hikes
- Fed chief said in October rates were ‘long way’ from neutral
- Treasuries, stocks rally as investors see less chance of hikes
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Federal Reserve Chairman Jerome Powell said interest rates are “just below” a range of estimates of the so-called neutral level, softening previous comments that seemed to suggest a greater distance and spurring speculation that central bankers are increasingly open to pausing their series of hikes next year.
Wall Street embraced the news with a rally for Treasuries and the biggest surge in major U.S. stock indexes since March. Powell’s “just-below” description tempered remarks last month that markets read as a signal of more aggressive monetary policy tightening. Speaking on Oct. 3, he said that “we may go past neutral. But we’re a long way from neutral at this point, probably.”