Powell Press Conference: Key Takeaways

The press conference of FED chairman Jerome Powell has just ended and its course was in line with market expectations.

Here are they key takeaways from the opening statement:

• Omicron variant is a risk but we still see rapid growth
• Demand remains very strong, buoyed by healthy household balance sheets
• Economic growth is still rapid
• Recent improvement in labor market has narrowed difference across classes and races
• FED thinks labor market will continue to improve
• The pandemic has pushed people out of the labor market, unclear when they will return
• Bottlenecks have been longer and stronger than anticipated
• Inflation likely to run above 2% goal "well into next year"
• Price increases have broadened while wages have also risen briskly
• Central bank expects inflation to fall close to its goal next year

Below we present some key takeaways from the Q&A session:

• Interest rates will not increase until the tapping process is completed
• We are a long way for knowing what omicron will turn out to be

Powell seems to be quite hawkish. The EURUSD erased initial losses, and US indices are also continuing to rise.

US500 dropped after the release of the FOMC decision statement. However, index started to recover quickly and upward move accelerated as Powell's press began. Source: xStation5

EURUSD - initially currency pair fell, however buyers manage to quickly regain control and price is testing the 50 SMA (green line). Source: xStation5