Investors are eagerly looking forward to Federal Reserve Chair Jerome Powell’s Wednesday visit before a policy panel in Europe in order to gain insight into the future direction of interest rates. Powell will be speaking at the ECB Forum on Central Banking, which is an annual event organised by the European Central Bank and is held in Sintra, Portugal. The theme of the 2023 ECB Forum on Central Banking is “Macroeconomic stabilisation in a volatile inflation environment”. The Forum will take place from 26 to 28 June 2023 in Sintra. Powell’s speech starts at 9:30 a.m. ET. The conference can be followed live on the ECB’s website.
The event brings together central bank governors, academics, financial market representatives, journalists, and others to exchange views on current policy issues and discuss the Forum’s key topic from a longer-term perspective. The ECB Forum on Central Banking is an opportunity to exchange views on current and longer-term policy issues.
Earlier this month, Federal Reserve Chair Jerome Powell testified before House Financial Services Committee and Senate Banking Committee. Powell’s testimony follows the Fed’s pause in aggressive rate-hiking, revealing ongoing inflation efforts, focus on big banks and adherence to the employment mandate.
In March 2022, the Fed began raising interest rates. The Fed left its key lending rate unchanged at a range of 5-5.25% at its most recent meeting, but according to the Fed’s most recent set of economic forecasts, two more quarter-point rate hikes may be required this year. What Fed policymakers decide during their July 25-26 meeting will be determined by economic indicators in the following weeks.
Nonetheless, Powell noted that keeping rates unchanged was a “prudent” approach, given that research suggests that increased interest rates take at least a year to trickle through to the broader economy. Powell reaffirmed during the hearing that monetary policy has a lag on the economy, but that it is extremely difficult to predict when rising interest rates will have a greater impact on the economy.
