Two of the leading factors in the recent market fluctuations we’ve been seeing over the past month are investor concerns over U.S. inflation rates and the continued spread of the Delta Variant within the U.S. borders… Well, this week, Wall Street got answers to both as FED officials met for their most recent two-day policy session.
Afterwards, FED Chair Jerome Powell made himself available for comment during a press briefing where he shared the details of the meeting and his thoughts on the impact the Delta Variant will have on the U.S. economy.
All of this coming at a time when the markets work to recover from what can only be described as a roller coaster ride of a month!
FED Meeting Details Released
FED Chair Jerome Powell spoke Wednesday on the details of the most recent two-day policy meeting. During his post-meeting press conference, Powell relayed the FED’s decision to continue to hold the federal funds rate within the 0% and 0.25% range. (A spot it’s become quite cozy in since March of 2020…)
In addition, the FED will continue with its plan to purchase $120 billion in bonds each month. A policy that’s designed to continue to keep credit cheap during difficult times known as “quantitative easing.”
Officials continue to remain hopeful, however, as the FED’s own post-meeting statement made sure to let the public know that they have seen real “progress” when it comes to an economic turnaround, stating, “Last December, the committee indicated that it would continue to increase its holdings of Treasury securities… until substantial further progress has been made towards its maximum employment and price stability goals. Since then, the economy has made progress towards these goals and the committee will continue to assess progress in coming meetings.”
Powell Opens Up About Delta Variant
Another topic Powell made sure to comment on during his press conference this week was the economic impact the spread of the Delta Variant would likely have on the U.S.
In a statement on the topic, Powell said, “What we’ve seen is with successive waves of COVID over the past year and some months now, there has tended to be less in the way of economic implications from each wave. We’ll see whether that is the case with the Delta variety. But it’s certainly not an unreasonable expectation.”
These are pretty confident words from the FED Chair just days after the very word of further economic shutdowns triggered a broad market sell-off, making the DOW fall more than 700 points (its worst drop since last Fall.)
To make matters worse, tech companies like Google and Apple have already halted their plans for employees to return to their offices until further details on the Delta variant are known.
Powell further added that he will be “carefully” monitoring the spread of the delta variant and any ripple effects it may have on the nation’s economy.
Investors may take solace in these comforting words but will more than likely continue to keep a close watch on any further covid-related spikes that could impact the economy the way they did in early 2020.
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