How Fed Chairman Powell Speaks May Be as Important as What He Has To Say

The next Federal Reserve meeting is scheduled for the end of this month, but not many of us are waiting with bated breath for what’s going to happen. Interest rates are expected to go up yet again, which will undoubtedly signal additional challenges for the commercial real estate sector as borrowing gets more expensive. But no matter how many times Jerome Powell, Chairman of the Fed, says that the central bank is aiming to fight inflation with continued hikes throughout 2023, the market doesn’t seem to believe him. 

Market analysts at HSBC predict that this will be the final hike with a basis point increase of about 50 points. Powell, on the other hand, is trying to push a narrative that the Fed will present several more rate hikes this year in an effort to slow the economy down, lessen the demand for labor, and ward off a devastating recession by inducing a more manageable one. In order for the Fed to be effective, it needs the markets (meaning the public) to listen to what it says and act accordingly. But data from the Federal Reserve Bank of Chicago points out that market conditions have loosened, giving investors confidence that a recovering market is a stronger signal than whatever Powell has to say.

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Failure to convince markets to take their economic prognosis seriously will result in the Fed inflicting greater pain with more blistering hikes over a longer period of

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