Powell could tackle key issues in high-profile speech Friday

Fed chair Jerome Powell’s highly anticipated speech: what to expect

Fed chair Jerome Powell’s highly anticipated speech: what to expect

Elsewhere on currency markets the U.S. dollar fluctuated but was holding gains ahead of the annual Jackson Hole symposium of central bankers, where Fed boss Jerome Powell is due to speak later Friday.

"If the strong growth in income and jobs continues, further gradual increases in the target range for the federal funds rate will likely be appropriate", Powell said.

Federal Reserve chair Jerome Powell sees plenty of reasons the USA economy's strong run will continue.

Investors will especially want to hear whether Powell addresses the central question of whether any of those developments might lead the Fed to alter its plan to raise interest rates two more times this year and to keep raising them next year as well. Real time estimates of the natural rate of unemployment were now too high, so a mechanistic approach to monetary policy would have recommended a much tighter stance in the 1990s. It is widely expected to hike rates again when it next meets in September. As a result, the Fed's path of gradual rate hikes was appropriate and "there does not seem to be an elevated risk of overheating".

The risk of surge in inflation remained low, Mr Powell said.

The odds of two additional hikes this year increased this week as Fed officials were seen as more hawkish.

"My colleagues and I are carefully monitoring incoming data, and we are setting policy to do what monetary policy can do to support continued growth, a strong labor market, and inflation near 2 percent", he said.

Gold futures on the COMEX division of the New York Mercantile Exchange closed higher on Friday, as the us dollar extended losses in the wake of a closely followed speech from Federal Reserve Chairman Jerome Powell.

The Fed seems to be "doing as good a job as they cannot to overshoot" the tightening of monetary policy, said David Levy of Republic Wealth Advisors.

However, he noted the U.S. economy remained strong and anyone who wanted a job could find one, while prices were rising at about the Fed's target pace of 2%.

Questioning Fed actions is normally off limits for United States politicians, since it could raise fears central bankers would feel political pressure and fail to act to head off rising inflation.

"Specifically, the reference there was that some members had become more uncomfortable with the narrative in the Fed policy statements that policy is still accommodative", Issa said. But it also criticizes preferences cited by some Fed officials who have urged moving more slowly to raise interest rates, seeking more evidence of a rebound in inflation before doing so.

George, in a separate CNBC interview, said: "Expressions of angst about higher interest rates are not unique to this administration".

In his remarks, Powell discussed the 1 percentage point decline in Fed policymakers' assessment of the natural rate of unemployment and the neutral interest rate since the USA central bank began raising rates in December 2015.

Trump believes that rate hikes would hinder economic growth and put a cap on the bullish USA stock market.

Under chairs Ben Bernanke and Janet Yellen, the case for holding off on rate hikes was simple as the unemployment rate declined from a devastating peak of 10 percent in 2009 with an economy still scarred by the financial crisis.

"W$3 hen you are uncertain about the effects of your actions, you should move conservatively", Powell said.

Powell's comments at the annual gathering of economic policymakers in Jackson Hole, Wyoming, will be viewed as a rebuke to the president.

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