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Wallstreet Closes Higher: Fed Chair Powell Goldilock Speech

by businessian
Wall Street closes higher after Fed Chair Powell delivers a 'Goldilocks' Speech.


Yes, that’s right. Wall Street closed higher on Friday after Federal Reserve Chair Jerome Powell delivered a speech in Jackson Hole, Wyoming. In which he said that the central bank is ready to increase interest rates further if needed to combat inflation. Powell’s speech was a “Goldilocks” message.  It was not too hawkish and not too dovish. This helped to calm market nerves.

The Dow Jones Average rose Industrial 125 points, or 0.4%, to close at 35,330. The S&P 500 gained 0.2% to 4,459. The Nasdaq Composite added 0.1% to 14,861.

Powell said in his speech that the Fed is “strongly committed” to taking inflation back to its 2% target. He acknowledged that inflation is running well above that level. He said that he believes it is transitory and will come down as supply chain disruptions ease and the economy grows.

Powell predicted the Fed is prepared to raise interest rates more than once to control inflation. However, he stressed that the Fed will be “data-dependent” in making its decisions and will not raise rates too quickly or aggressively.

The markets took Powell’s speech as a sign that the Fed is more serious about fighting inflation but also mindful of the risks to the economy from raising rates too quickly. This helped calm market nerves and led to stock gains on Friday.

This will show how the markets will react to the Fed’s next policy decision, due in September. However, Powell’s speech reassured investors that the Fed is on top of the inflation situation which also effected the wall street.

Click here to continue reading: https://edition.cnn.com/business/live-news/markets-jackson-hole-fed-meeting/index.html

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