What to Expect at the FOMC Press Conference Today 4:15pm ET

 

This week's FOMC press conference will be full of surprises, but some of the most interesting points to look out for are as follows: Bernanke and Powell both support a quarter-point rate hike. Costlier energy is sending inflation higher than it would have been otherwise. Biden says mass shootings are preventable. Read on to find out what else to expect! Below is a brief summary of what to expect this afternoon at the FOMC press conference.

Powell supports a quarter-point rate hike

Fed Chair Jerome Powell weighed the risks of a European land war against the prospect of raising interest rates at the March meeting. Despite the risks, Powell said he supports a quarter-point rate hike, but he will move more aggressively if inflation does not cool off quickly. The recent conflict in Ukraine has sent global financial markets into a tailspin.

The Fed's monetary policy is dependent on its long-run inflation expectations, which have been rising steadily. Powell said that he does not believe that there's a high probability of an economic setback this year. He said the probability of a recession next year is not elevated, and that inflation would moderate later this year as supply chain bottlenecks clear and more people return to the workforce.

At the press conference, Powell reiterated that he still supports a quarter-point rate hike. In addition to the increased inflation risk, he said that the Fed's balance sheet needs to be trimmed. The incoming data will be closely watched, and the Fed's policymakers will adjust their actions accordingly. However, it's unlikely that Powell will announce the decision in public.

Bernanke says recent spending cuts have not had a negative effect

Federal Reserve Chairman Ben Bernanke has warned lawmakers against making arbitrary spending cuts during the current economic crisis. The abruptness of these cuts can cause inefficiencies in the federal budget, Bernanke said. In addition, the suddenness can lead agencies to cancel programs, creating longer-term costs. The federal government has been under a temporary reprieve from the Budget Control Act for the past two years, but automatic spending caps are set to return on Oct. 1 unless Congress reaches a compromise.

Federal Reserve Chairman Ben Bernanke testified to the Senate Banking Committee today, warning that a self-inflicted wound could lead to higher interest rates and slower job creation. He also took aim at the proposed fiscal cliff, a proposal by Tea Party members to ignore the debt ceiling to pay off our debts and pay off China. Bernanke said such a move is "disappointing" for the country and the economy.

Costlier energy will send inflation higher than it otherwise would have been

The Federal Reserve's target inflation rate is 2 percent. A 2 percent increase is the average rate over time. If this inflation rate is maintained, it will allow companies to adjust to a changing economy. Unfortunately, more expensive energy will raise the cost of commodities like food and clothing. That means inflation will be higher than it otherwise would have been. But if it is regulated properly, the Fed should still be able to keep inflation at a reasonable level.

One factor that drives inflation is supply chain disruption. Among the causes of this disruption are the war in Ukraine and the lockdown in China. The latter has caused investors to expect slower economic growth in China, which is likely to raise prices. A third factor that may drive inflation is political economy. A higher inflation rate may encourage governments to push for deregulation to lower prices. This has happened before, and the Biden administration is moving in that direction.

Biden says violence from mass shootings is preventable

Vice President Joe Biden has offered his condolences to the city of Uvalde, Texas, where 19 children and two adults were killed in the Robb elementary school shooting. While Congress has failed to pass any major gun control legislation, activists continue to push for more restrictive gun laws. Until then, the country will continue to be at risk of mass shootings. The tragedy at Fort Hood is the most recent example of this. In 2009, there were thirteen fatal shootings at a Texas school. In April, the same year, the Marjory Stoneman Douglas High School shooting in Parkland, Florida, left 17 dead. This year, however, the number of mass shootings is at an all-time high.

The United States must listen to the families of mass shooting victims and take action to curb gun violence. President Biden also visited New York and Texas, two states that recently suffered multiple shootings. He spent hours with the families of the victims, and said that he looked forward to working with them on climate change and building economic resilience in the Pacific region. But he also acknowledged that gun violence is a "national crisis" that requires immediate action.