Federal Reserve Chair Jerome H. Powell will be speaking at the Macroeconomics and Monetary Policy Conference in a conversation moderated by Kai Ryssdal of Marketplace. The discussion with Powell takes place at the Federal Reserve Bank of San Francisco, California at 11 AM.
The afternoon session will see a discussion on – “Speeches by the Fed Chair Are More Important Than FOMC Announcements: An Improved High-Frequency Measure of U.S. Monetary Policy Shocks” by Annette Vissing-Jorgensen, Federal Reserve Board and Jonathan Wright, Johns Hopkins University.
Meanwhile, global markets wait for the Fed to deliver the first rate cut. “ If unemployment surprises the Fed to the upside this year, that could motivate them to cut faster to balance their dual mandate for a strong job market and low inflation. We continue to expect the Fed to cut the Fed funds target by three-quarters of a percent throughout 2024, most likely in quarterly cuts of a quarter percentage point each at their June, September, and December decisions,” says Bill Adams, Chief Economist for Comerica Bank.
The FOMC meeting in March 2020 ended with the US Fed keeping the rates unchanged at a range of 5% to 5.25%. Powell in his Press Conference acknowledged that “inflation remains high, and progress toward lowering it is doubtful. We are dedicated to returning inflation to our target of 2 percent.”
PCE in January 2024 rose by 2.4%. Powell on March 20 said, “Estimates based on the Consumer Price Index and other data indicate that total PCE prices rose 2.5 percent over the 12 months ending in February; and that, excluding the volatile food and energy categories, core PCE prices rose 2.8 percent.”
The Fed dot plot suggests that if the economy evolves as projected, the appropriate level of the federal funds rate will be 4.6 percent at the end of this year, 3.9 percent at the end of 2025, and 3.1 percent at the end of 2026—still above the median longer-term funds rate.