What Happens After the Fed Funds Rate Gets to ‘Neutral’? Powell Just Hinted at an Answer – Gold Silver Reports

The big question is: What happens after the fed funds rate gets to ‘neutral’, which is somewhere between 2.50%-3.00% in the Fed’s view.

We may have just gotten an answer.

“While inflation has recently moved up near 2 percent, we have seen no clear sign of an acceleration above 2 percent, and there does not seem to be an elevated risk of overheating,” he said.

Powell comments on inflation suggest he will wait and see, rather than continue to tighten. That’s a potential watershed for financial markets.

To be sure, it’s nothing definitive but a decision by the Fed to go to the sidelines would be a negative for the US dollar and positive for risk assets. – Neal Bhai Reports (NBR)

Spread the love

Neal Bhai has been involved in the Bullion and Metals markets since 1998 – he has experience in many areas of the market from researching to trading and has worked in Delhi, India. Mobile No. - 9899900589 and 9582247600

Leave a Comment