Jerome Powell Indicates Inflation is Improving

Jerome Powell has indicated that disinflation has begun despite the labor market remaining strong but said there is still a long way to go. Indeed, the significantly hotter-than-expected jobs report that was recently released indicates to the Federal Reserve that ongoing interest rate hikes are appropriate.

Furthermore, when asked if the central bank would consider changing its inflation target rate from 2% to 3%, Powell was quick to shoot down that idea, stating that 2% was the global standard and that it would not change. As a result, he currently expects inflation to fall to 2% sometime in 2024, indicating that this will not be a short process simply because we are approaching peak interest rates.

As a result, the ETFs that track the major indices saw a lot of volatility in today’s session. These include:

• SPDR S&P 500 ETF Trust (SPY)
• Invesco QQQ Trust (QQQ)
• SPDR Dow Jones Industrial Average ETF Trust (DIA)

Disclosure