Seoul shares open lower ahead of Fed chief's speech
Korea HeraldDec 24, 2022
The Facts
In remarks made Wednesday at the Brookings Institution, US Federal Reserve (Fed) Chair Jerome Powell said the central bank would likely slow the pace of its interest rate hikes at its upcoming December meeting.
Since near-zero interest rates as recently as March, the Fed has lifted rates to a range of 3.75% - 4%, with its past four rate increases occurring in increments of 0.75%. Following calls from central bankers to slow the pace, Powell hinted at just a 0.5% increase this month.
The Spin
Establishment-critical narrative
Powell’s unorthodox decision to wait until maximum employment and inflation before taking action got us into this mess. Now he’s promising more “don’t shoot till you see the whites of their eyes” policymaking by pushing the economy to the precipice of a recession rather than reacting to positive forecasts by easing rate hikes more quickly. Let’s hope he knows what he’s doing this time around.
Pro-establishment narrative
Powell is doing his best to guide the economy through these unprecedented times, and there have been some positive signs. Of course, the Wall Street piranhas can't help but overreact to the slightest bit of optimistic news, directly undercutting the Fed's tightening policy and forcing it to recalibrate by leaning toward even more restrictive measures. Any complaints about the economy should be directed toward Wall Street.
