The Federal Reserve (Fed) decided to maintain interest rates in May, postponing anticipated cuts to December. Following this announcement, Fed Chairman Jerome Powell delivered his first public remarks since the FOMC meeting. 🎙️ His comments offer insight into the Fed’s evolving strategy amidst inflationary pressures. Powell highlighted several key points: 📈
* **Inflation Reassessment:** He emphasized that the current inflation picture demands a reevaluation of the employment gap and average inflation targets, as the assumption of moderate inflation following economic weakness is no longer valid.
* **Supply Shocks:** Powell acknowledges the increasing likelihood of more frequent and sustained supply shocks. This suggests adjustments to monetary policy may be necessary.
* **Framework Revision:** The Fed’s framework, adopted in 2020, will undergo a review process to ensure adaptability across various scenarios, including potential extended periods of supply-side disruption.
* **PCE Estimate:** Powell provided an anticipated PCE value of around 2.2% for April.
**Please Note:** This information is not intended as investment advice.