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POKER FACE. US Federal Reserve boss Jerome Powell keeps his cards handy. The central bank Wednesday maintained status quo on interest rates and $ 120 billion in monthly asset purchases, as expected. He was more optimistic about the economic outlook, but Powell declined to hint at his diminishing timeline. He has to stop playing poker.
Americans are once again feeling satisfied with the economy. The Conference Board’s consumer confidence index in April was at its highest level since February 2020. Meanwhile, the S&P CoreLogic Case-Shiller home price index jumped 12% in February, the fastest pace fast since February 2006.
Still, Powell said on Wednesday it was not time to talk about cutting bond purchases. This should happen when the Fed hits its twin target of long-term inflation of 2% and so-called full employment, the latter of which is a somewhat nebulous target to find out more.
If the economy continues to improve, the Fed could quickly start to appear too dovish. If it gives the market time to prepare, the transition to phase-out could potentially happen without the market blindly going all-in. (By Gina Chon)
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