Esther George, the former President of the Kansas City Federal Reserve, offered insights into the reasons behind the US Federal Reserve’s FOMC interest rate decisions.
Former Kansas City Fed President Esther George has echoed the prevailing sentiment among financial markets that the US Federal Reserve might not implement interest rate hikes in the coming months. Many anticipate the Fed to stick with the existing target rate range of 525-550 basis points during their Federal Open Market Committee (FOMC) meeting.
U.S. Federal Reserve’s Inflation Goal
The upcoming monetary policy decision by the U.S. central bank will consider its goal of achieving a 2% inflation rate, which is crucial for ensuring stable prices in the U.S. economy.
In an interview with CNBC, Esther George emphasized that the U.S. central bank has been clear in its commitment to prioritizing price stability. She explained that the Fed is dedicated to maintaining stable prices in the economy over the long term.
However, George also cautioned that achieving and sustaining the inflation target might have implications for the U.S. job market. She suggested that the Fed might temporarily halt interest rate hikes to assess how inflation trends develop, especially in terms of disinflation.
Bitcoin Price Direction
Bitcoin’s price has recently shown strength as it heads into the FOMC meeting, which is widely anticipated by the market. However, the future direction of the cryptocurrency market may depend on how investors react to Fed Chair Jerome Powell’s speech. Powell’s speech will provide insight into whether the central bank is inclined towards a dovish (less aggressive) or hawkish (more aggressive) stance regarding future interest rate decisions.
According to the CME FedWatch Tool, which assesses the likelihood of the Fed’s decision on the Federal target rate during FOMC meetings, traders are highly confident (99%) that there will be a pause in rate hikes. Therefore, the key focus will be on Powell’s comments regarding inflation targeting during his speech.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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