Federal Reserve Chairman Jerome Powell explains the decision to cut the policy rate, federal funds rate, by 25 basis points to the range of 4.25%-4.5% after the December meeting and responds to questions in the post-meeting press conference.
Key quotes Can dial back policy restraint more slowly if inflation not moving sustainably toward 2%. Policy is well-positioned to deal with risks. Can ease more quickly if labor market weakens unexpectedly or inflation falls more quickly. Today was a closer call but the right call. Decided it was the right call as best decision to foster achievement of goals. Risks are two-sided. Trying to steer between those 2 risks. Downside risks to labor market have diminished, but still cooling.
How do the decisions of the Federal Reserve impact the US Dollar? The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve . The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value.
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