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Various Federal Reserve (Fed) policymakers made statements on Thursday, with Fed Chairman Jerome Powell offering additional remarks during his testimony before the US Senate Banking Committee. Cleveland Fed President Loretta Mester echoed similar sentiments in her address at the Virtual European Economics and Financial Center.
Key highlights:
- Powell:
- In a state of anticipation for increased confidence, we are nearing that point.
- Anticipates potential bank failures within commercial real estate, particularly among small and medium-sized banks, while assuring the absence of significant impact on major banks.
- Expresses confidence in the Federal Reserve’s current policy stance.
- Contemplates the possibility of reducing the maturity of Fed holdings
- . Foresees the continued stabilization of food inflation.
- Mester:
- Persistent inflation may be a prevailing factor throughout the year.
- In the event of the economy aligning with projections, it is probable that rate cuts might be implemented later in the year. Premature Fed rate cuts would constitute a significant error.
- The Fed has the advantage of maintaining a steady course while gathering additional data.
- Anticipates any Fed rate reduction to proceed with a highly gradual approach.
