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Powell "kept silent" on the extent of interest rate cuts, and two Fed officials acted as "mouth substitutes"?

2024-09-27

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Federal Reserve Chairman Jerome Powell did not discuss monetary policy or the economic outlook in his brief opening remarks at the New York Fed.

Gold prices rose in pre-market trading on Thursday, breaking through previous all-time highs to hit a record high of $2,685.58. Falling global interest rates, escalating conflicts in the Middle East and a weaker dollar due to the increased likelihood that the Fed will continue its aggressive monetary easing strategy are all factors driving the gold bull market.

On the same day, two senior Fed officials spoke. Fed "third-in-command" Williams announced the establishment of a benchmark interest rate use committee, and Bowman hopes that the Fed's balance sheet will be "as small as possible."

Williams: New initiatives to study reference rates

New York Federal Reserve Bank President John Williams said on Thursday that the bank will set up a new group to track the use of reference rates in private markets.

Williams said his bank is setting up the so-called Reference Rate Use Committee, which will bring together market participants to "support the integrity, efficiency and resilience of the use of interest rate benchmarks or reference rates (including those published by the New York Fed) in financial markets."

He added in a prepared speech at the bank event that the first meeting of the group will be held next month.

Williams said the committee will study how the market uses reference rates and help investors and traders make the best use of them.

The official did not comment on the economic or monetary policy outlook in his prepared remarks.

Bowman: The use of the discount window is for emergencies

Fed Governor Bowman also spoke on the economic outlook and monetary policy, with content that was almost identical to her remarks on Tuesday (September 24).

Regarding regulation, Bowman pointed out that the discount window is for emergencies, and the purpose of the discount window is not the same as the lending of the Federal Home Loan Bank. It is important to recognize that there are some shortcomings in discount window borrowing, and it is critical to repair the discount window through modernization. The Fed's supervision should focus on core risks. She said, "We are not responsible for ensuring that every bank can continue to exist."

"I want the Fed's balance sheet to be as small as possible," Bowman said.

Bowman is very satisfied that she has different views from the majority of the FOMC. She said: "Fed policymakers should be able to express different views. I disagree with many people on the FOMC about how people, banks and businesses work in the economy. I have been on the committee for a long time and have become more confident in my views."

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Powell "kept silent" on the extent of interest rate cuts, and two Fed officials acted as "mouth substitutes"?

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