Jerome Powell is optimistic.
But not yet enough to announce the start of a reduction in the monthly public debt buybacks that the Federal Reserve has been practicing since March 2020. The moment is approaching nonetheless.
The boss of the Fed is obviously trying not to take by surprise markets addicted to this hard drug called "
quantitative easing
".
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The most listened to man in the world of finance maintained the ambiguity in his eagerly awaited speech, addressed to the virtual symposium of central bankers in Jackson Hole on Friday. Reassured by the favorable development of employment since July, he said he was concerned about the current level of inflation, but still urged an end to quantitative easing.
“
At the recent Monetary Committee meeting in July, my opinion, as well as that of most participants, was that if the economy developed broadly as expected, it might be appropriate to start slowing the pace of asset purchases this year,
”explains Jerome - aka Jay - Powell.
And to specify that since this meeting, new statistics have confirmed the improvement in the job market.
Read alsoUnited States: the Fed could start tightening the screws in 2021
The Delta variant, whose actual impact on activity is still uncertain, but which has precipitated American morale to the lowest in ten years, gives the Fed a perfect excuse to maintain the status quo.
“
Inflation at the current level is a cause for concern… but it's probably a temporary phenomenon
,” Powell repeats.
“
Reacting too quickly to temporary fluctuations in inflation could do more harm than good,
” he maintains.
The Dow Jones trending upward
If August's employment figures, expected in early September, are as good as July's, the Fed will likely take another step towards normalizing its monetary policy. In the immediate future, in the absence of a destabilizing surprise announcement, on Wall Street, the Dow Jones as the price of bonds were trending upward at the start of the session.
