Last week, investors were hanging on every word of Federal Reserve Chairman Jerome Powell's speech at the Economic Club of NY with the markets responding positively when Powell said that rates are "just below neutral", but what exactly did he mean?
"The Federal Reserve's mission is to promote a strong economy and sound financial system", Powell said Monday in remarks prepared for delivery in Washington.
"Interest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy - that is, neither speeding up nor slowing down growth", Powell said during a speech at the Economic Club of NY.
He also noted that a decades-long decline in economic mobility has made it more hard for lower-income Americans to move up the economic ladder.
His comments, at the inaugural Janet L. Yellen Award for Excellence in Community Development, were released by the Fed and had not previously been listed on its schedule of public events.
Powell's comments didn't directly address his economic outlook or policy. The central bank has raised rates three times this year and is expected to boost rates for a fourth time at its December 18-19 meeting.
During the panel themed on US economy and monetary policy at New York-based Council of Foreign Relations, Federal Reserve Vice Chairman for Supervision Randal Quarles explained Chairman Jerome Powell' s latest comments on interest rates.
Furthermore, in terms of further rate hikes, the Fed's decision will be heavily dependent on the pulse of the economy as revealed by the latest data it receives.
Investors had been hoping to learn more about Powell's current thinking in testimony he was scheduled to deliver Wednesday before the congressional Joint Economic Committee.
"Chair Yellen was attentive to low- and moderate-income communities, recognizing that Americans on the most precarious rungs of the ladder often feel the impacts of a downturn soonest and the longest", Brainard said.