Powell to Stress Fed Patience on Rate Hikes: Decision Day Guide

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Jerome Powell will debut the Federal Reserve’s latest communications strategy — a press conference eight times a year — by emphasizing patience in raising interest rates, a message the chairman struggled to deliver in December.

The Federal Open Market Committee is widely expected to keep rates unchanged in a 2.25 percent to 2.5 percent target range at the conclusion of a two-day gathering on Wednesday in Washington. Its policy statement due at 2 p.m. may alter a commitment to further gradual hikes. Thirty minutes later Powell will address reporters, inaugurating his new approach of holding a media briefing after every FOMC meeting.

Almost eight years after then-Fed chief Ben Bernanke held the first press conference, officials believe these briefings bolster public understanding of the central bank. On the other hand, doubling their number raises the risk of gaffes. Stocks fell to a 20-month low in the days after Powell spoke on Dec. 19 as investors digested the Fed’s commitment to “some further gradual” rate hikes. A Bloomberg News report during that period that President Donald Trump had discussed firing the Fed chief also added to market unease.

“We’re entering a tricky period for communications,” said Stephen Stanley, chief economist of Amherst Pierpont Securities LLC. “It was easy when the Fed was raising rates at every other meeting, but that is done and the Fed is pushing the idea of data dependence. In 2019, communications will get a lot more complicated.”

Read more at Bloomberg

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