(Kitco News) Federal Reserve Chair Jerome Powell described the current inflation situation as “slightly worse” than in December, stating that there is plenty of room to raise rates without hurting the jobs market.
“There’s quite a bit of room to raise interests without threatening the labor market. This is by so many measures a historically tight labor market — record levels of job openings, quits, wages are moving up at the highest pace they have in decades,” Powell told reporters.
All eyes were on the Fed Chair Wednesday afternoon after the U.S. central bank held rates steady but signaled a rate hike in March. Powell clarified the Fed’s thinking around the March rate hike, stating: “The committee is of the mind to raise the federal funds rate at the March meeting.”
In response to Powell’s message, gold plunged more than $35, with February Comex gold futures last trading at $1,815.70, down 2% on the day. The U.S. stock market also reversed gains following Powell’s press conference, with the Dow falling 0.9%, the S&P 500 down 0.8%, and the Nasdaq dropping 0.6%.