US Federal Reserve Chairman Jerome Powell and European Central Bank (ECB) President Christine Lagarde discussed the monetary policy outlook at the ECB Central Banking Forum in Sintra. The Fed Chairman pointed out that the labor market is still strong. However, he also acknowledged the cooling in inflation. The markets found Powell a bit hawkish. Following this, the price of gold and Bitcoin started to decline.
Fed Chairman Jerome Powell speaks at the ECB!
Gold prices fell modestly in early US trading on Tuesday. The price of Bitcoin traded close to flat. Precious metals traders expect major economic and political developments this week to drive prices. Meanwhile, Tuesday’s US data highlights include the Federal Reserve’s closely watched Job and Labor Turnover Survey (JOLTS) report. The FOMC minutes will be released on Wednesday afternoon and the monthly employment report on Friday. US markets will be closed on Thursday, July 4 due to the Independence Day holiday.
As you have been following on Kriptokoin.com, markets are closely watching Fed Chairman Jerome Powell for the Fed’s next moves. Amid these expectations, FED Chairman Jerome Powell gave a speech at the ECB Central Banking Forum in Sintra. While the FED Chairman was speaking, the price of gold and Bitcoin started to head south. The highlights of Powell’s speech were as follows:
- The labor market is still strong.
- The downward trend in inflation is showing signs of resumption.
- A lot of progress has been made on inflation.
- We are returning to the disinflationary path.
- We need to be more confident before we cut policy rates.
- We need to see more data, as we have seen recently.
- The data represents significant progress.
- If the labor market weakens unexpectedly, that will cause us to react.
- We have the ability to take our time and get this right.
- We are aware of the risk of going too early and too late.
- Risks are becoming much more balanced.
- Services inflation is generally stickier.
- Wage increases are pulling back towards more sustainable levels.
- Wage increases are still above the level at which they will reach equilibrium.
- The labor market is cooling.
- Inflation could return to 2% late next year or next year.
Key quotes from Lagarde
- We are very far along the disinflationary path.
- Inflation is moving in the right direction.
- We are paying a lot of attention to inflation components and services.
- We don’t need services inflation to be 2%.
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