US Federal Reserve Chairman Jerome Powell delivered an eight-minute keynote speech at the Kansas City Fed’s annual policy forum in Jackson Hole, Wyoming, Bloomberg reports. Powell’s speech made it clear that the Fed may continue to raise interest rates to stamp out inflation.
The US Federal Reserve has been on an aggressive campaign to raise interest rates and Powell’s speech at the Jackson Hole gathering of global monetary policymakers said its fight against inflation was not over, dashing Wall Street’s hopes. It has been that the Fed may soon ease higher interest rates.
US stocks On Friday, the three major indices Dow Jones, S&P and Nasdaq closed with losses of three per cent or more. According to Bloomberg, in the span of just eight minutes, Powell’s speech triggered a market catastrophe that reduced the wealth of American billionaires to $78 billion.
The world’s richest man and the head of Tesla Elon MuskHis net worth stood at $254 billion as of August 27, 2022, while his fortune saw a decline of $5.5 billion, while the second-richest Jeff Bezos lost $6.8 billion on the Bloomberg Billionaires Index, the top two billionaires by wealth. There was a loss of about $ 12 billion.
Meanwhile, Bill Gates and Warren Buffett’s wealth fell by $2.2 billion and $2.7 billion, respectively, while Sergey Brin’s wealth dropped below $100 billion, according to data from Bloomberg. The Bloomberg Billionaires Index is a daily ranking of the world’s richest people. Figures are updated at the end of every business day in New York.
Moderate signs of a slowdown in the US economy and easing of price pressure had raised hopes in financial markets that the central bank could hike its aggressive interest rates, and perhaps even reverse course next year. US indices fell after Powell said the Fed would need to keep interest rates high enough to slow the economy for some time in its effort to contain inflation.
Powell acknowledged that the Fed’s continued tightening would be a pain for many households and businesses as its higher rates further slow the economy and potentially lead to job losses. “These are the unfortunate costs of reducing inflation. But failure to restore price stability will mean far more pain,” he said.
(with inputs from Bloomberg)
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