Fed's Powell Says In Theory Real Rates Go Up As Inflation Goes Down, But Can't Mechanically Adjust Policy; We Are In A Risk Management Mode; We Are Really In A Risk Management Mode
Portfolio Pulse from Benzinga Newsdesk
Fed Chair Powell emphasized that as inflation decreases, real interest rates theoretically increase, but monetary policy cannot be adjusted mechanically. The Fed is currently prioritizing risk management in its approach to policy decisions.
January 31, 2024 | 7:44 pm
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POSITIVE IMPACT
Powell's comments suggest a cautious approach to raising interest rates, which may lead to a more stable market environment, potentially benefiting SPY as a broad market ETF.
Powell's remarks on risk management indicate a careful and potentially less aggressive approach to interest rate hikes, which can soothe market volatility. As SPY tracks a broad range of stocks, a stable rate environment may reduce uncertainty and support the ETF's performance in the short term.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 80