No more secret signals from Fed signals Chief Powell

September 14, 2018 - By Mildred Donovan

Jerome Powell, the Chairman of FED has recently released another statement. After his last words, indexes on the market changed their daily routine, and he finally decided to clarify situation.

Powell blames financial experts in searching for secret meaning and hints in every word of FED representatives. Now he warns the market and its players to watch for the real data on inflation, on jobs or companies’ reports, to understand the situation on the market. He says that central bank is not the proper source for forecasts and predictions.

That sounds like a change in the policy of Fed, which usually gave a lot of supportive information for markets before even started any action or made any decision. For the last 10 years, at least, market analysts relied on forecasts from Fed officials. It has its influence on stocks, partly guiding the American economy to recover from the crisis.

Fed always told that they are going to do anything to protect fragile American economic and its growth. Analysts called it forward guidance from Fed. They always had forecasts from Chairs of Fed.

However, this Wednesday, the Fed has announced their decision to remove this part from official policy.

According to some investors, Fed makes its move to signal that central bank came closer to the end of interest rate hike policy which started in 2015, December.

And now, when American economy is on its rise, some experts believe, that Fed wants to make a step back.

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