Powell Talks Tariff Impact Again, Emphasizes Labor Market Relies on Price Stability
Jinse reported that Federal Reserve Chairman Jerome Powell reiterated that the Fed will focus on preventing tariff-driven price increases from turning into more persistent inflation. "Our responsibility is to keep long-term inflation expectations firmly anchored and to ensure that a one-time price increase does not turn into a persistent inflation problem," Powell said in a prepared speech for the Economic Club of Chicago on Wednesday. He also noted that policymakers will balance their goals of promoting full employment and maintaining price stability, "keeping in mind that without price stability, we cannot create the long-term strong labor market conditions that benefit all Americans." This statement reinforces the signals Powell has emphasized multiple times, that Fed officials are not in a hurry to adjust the benchmark policy rate. He expressed similar sentiments shortly before, on April 4. Powell and other Fed policymakers have expressed support for keeping interest rates unchanged while waiting for clearer signals on how President Donald Trump's economic policies, particularly in trade, will affect the U.S. economy. Powell acknowledged that economic weakness and rising inflation could eventually create conflicts between the Fed's two goals. "We may find ourselves in a challenging situation where our dual mandate goals are in conflict," he said. "If that happens, we will consider the economic conditions and the distance between each goal, as well as the potentially different time dimensions needed to bridge these gaps."
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Australian stock market declines due to persistently high bond yields and rising oil prices
As of market close, mining and banking stocks recorded the largest declines this week, as investors await the minutes of the Reserve Bank of Australia’s meeting scheduled for October 13. Boosted by a deal between Google and Constellation Energy, uranium mining stocks surged. On Wednesday, the Australian stock market closed slightly lower amid volatile trading, with global yields and oil prices remaining high, leading investors to adopt a wait-and-see attitude. The benchmark S&P/ASX 200 Index closed down 0.1% at 8,727.70 points, having risen as much as 0.2% during the session. The index had gained more than 1% over the past three trading days. The recent bond market sell-off kept the yield on the benchmark 10-year U.S. Treasury above 5.3%, dampening risk appetite among investors. Oil prices rose amid storm threats in the Gulf of Mexico and escalating tensions between Saudi Arabia and Houthi forces. According to BetaShares investment strategist Hugh Lam, despite persistently high bond yields, the stock market remains resilient with global corporate earnings serving as the main support; however, sustaining the rally through year-end is becoming increasingly difficult, especially for long-duration growth stocks. Rising yields signal the market expects higher borrowing costs for governments and corporations, and also anticipates sustained inflation. On the day, banking stocks fell 0.6%, marking their worst single-day performance in nearly a week. Of the “big four” banks, Westpac saw the largest drop, down 1.2%. The market is awaiting the Reserve Bank of Australia’s policy meeting minutes next week for insights into policymakers’ views on inflation, which prompted the central bank to raise interest rates last week to their highest levels in 15 years. September quarter consumer price data, due at the end of October, may provide further clues on the direction of interest rates. The mining sub-index slipped 0.3%, dragged down by falling copper prices. Industry leaders BHP fell 0.7% and Rio Tinto dropped 0.6%. Energy stocks rose 0.5%, driven by uranium miners after Google signed a 20-year power purchase agreement linked to nuclear power generation. Component stocks Deep Yellow, Paladin Energy, and NexGen Energy Ltd gained between 2.5% and 4.6%. New Zealand’s S&P/NZX 50 Index fell 0.1%, closing at 13,684.04 points.
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