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Federal Reserve Chairman Powell stressed again Thursday that the Federal Reserve can be patient in deciding whether to raise interest rates further in the future. Policymakers are judging whether the U.S. economy will slow down this year as some market participants fear, or continue to grow as healthily as the Federal Reserve expects.
This is Powell's second appearance in less than a week, which did not cause too much reaction from financial markets, suggesting that he may have found a way to describe central bank policy without surprising investors. In his recent remarks, he has on several occasions led to large fluctuations in the market.
With no signs of excessive inflation or excessive financial market risk, Powell said the Fed would "wait and see" in the coming months to see which of the two scenarios would be the theme of 2019.
"Especially when inflation is low and under control, we can be patient, patient, and conscientious to see which of these two scenarios will be the theme of 2019," he said in a speech at the Washington Economic Club.
The Standard & Poor's 500 Index. SPX rose slightly by 0.45% on Thursday, while U.S. Treasury yields remained unchanged. By contrast, Powell's three speeches after the end of November brought the stock market up or down by an average of 2.4%. His speech on Friday triggered the biggest market reaction in 17 public speeches since taking office in February last year, with the S& P 500 index rising 3.43% and 10-year Treasury yields rising 11 basis points.
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