According to comprehensive media reports, Federal Reserve Chair Jerome Powell stated at the post-interest rate decision press conference that no one’s baseline scenario currently expects the next policy action to be a rate hike. He also noted that officials are evaluating the next steps following last year’s consecutive rate cuts. He highlighted that the inflation rate in December remained significantly above the central bank’s 2% target, with core Personal Consumption Expenditures (PCE) estimated at 3%. He emphasized that inflation overshooting is primarily driven by tariffs rather than demand, and excluding the impact of goods tariffs, core PCE is only slightly above 2%. The effects of tariffs are expected to peak this year before tapering off.
Regarding the consecutive record-breaking gold prices, Powell responded that some may argue the Federal Reserve is losing credibility, but that is far from the truth. He pointed out that observing trends in inflation expectations shows the Fed's credibility remains at an appropriate level. Although the Federal Reserve does continuously monitor fluctuations in asset prices, it will not overreact to changes in specific asset prices.
