Powell Speech Preview: Fed chairman faces tough questions
22.03.2023, 15:55

Powell Speech Preview: Fed chairman faces tough questions

  • Jerome Powell will explain Fed interest rate decision, economic projections in press conference.
  • Fed chair will face tough Q&A session trying to balance inflation and financial stress risks.

Jerome Powell, Chairman of the Federal Reserve System (Fed), will speak in a press conference on Wednesday at 18:30 GMT, 30 minutes after the Fed Interest Rate decision is announced. The speech of Powell will reflect the current views of the Federal Open Market Committee (FOMC) on monetary policy and will also update the Summary of Economic Projections, also known as the dot plot.

Powell will face tough questions from the press on whether the US central bank can keep going with its interest rate hikes considering the financial stress that the banking system has suffered recently. Jerome Powell’s words will carry enormous importance for the market, with the US Dollar, and the US Treasury bonds leading the way and affecting the valuation of most asset classes. 

According to Yohay Elam, Senior Analyst at FXStreet, Powell should persevere in the interest rate hikes and “convey a message of confidence” to the markets. Elam expects Powell’s press conference to alleviate any market over-reaction to the likely interest rate hike: 

“The sweetener for markets could come in the accompanying statement. Powell and his colleagues will have to comment on the banking crisis, probably by saying they are working closely to resolve the issues and are ready to act if the situation deteriorates.

Such remarks would ease and balance the pain coming from raising rates and defying expectations for rate cuts later this year.”

 

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