Investors and Federal Reserve watchers will hear Jerome Powell’s latest take on the economic outlook on Tuesday, following higher-than-expected inflation data last week.
Powell will participate in a discussion on Tuesday at 1:15 p.m. Eastern time with Bank of Canada Gov. Tiff Macklem at the Wilson Center think tank in Washington, D.C. Part of the Canada Institute’s Washington Forum on the Canadian Economy, the conversation will be moderated by Bill Morneau, co-chair of the forum and former minister of finance of Canada.
“The two central bank leaders will share their perspectives on the economic outlook, monetary policymaking in their respective countries, and the enduring value of the Canada-U. S. economic relationship,” reads the event description.
The Fed chairman most recently delivered public remarks in early April, when only January and February inflation figures had been published. Powell largely dismissed stalling progress on reducing inflation in early 2024 as bumps in the road
“The recent data do not materially change the overall picture, which continues to be one of solid growth, a strong but rebalancing labor market, and inflation moving down toward 2% on a sometimes bumpy path,” Powell said on April 3. He continued to expect interest-rate decreases in 2024. Fed officials’ median forecast called for a total of 0.75 percentage point of reductions to the federal-funds rate by the end of the year, from the current 5.25% to 5.5% target range.
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But after March data released on April 10 made it three months in a row of hotter-than-expected inflation, many economists and Wall Street strategists began to expect fewer cuts this year. Markets have reacted strongly, sending bond yields higher and stocks lower.
The headline and core consumer price indexes were both up 0.4% in March, and 3.5% and 3.8% year over year, respectively, government data showed last Wednesday. The annual rate of inflation has been moving largely sideways for the past six months, after dropping for most of 2023. That isn’t the kind of demonstrated progress on reducing inflation that Powell and other policymakers have been saying they’re looking for.
Any clues to how March inflation data has—or hasn’t—swayed Powell’s thinking will be Tuesday’s highlights.
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Write to Nicholas Jasinski at nicholas.jasinski@barrons.com
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