Federal Reserve Chair Jerome Powell reaffirms a cautious approach to interest rate hikes, expressing confidence in the effectiveness of the current policy rate and signaling a potential pause in rate hikes. Powell's remarks have influenced market sentiment, leading to marginal gains in U.S. stocks and reinforcing expectations of steady rates in upcoming policy meetings. Market expectations for aggressive interest rate cuts are pushed back, with Powell emphasizing a balanced approach and the option to tighten policy further if necessary. The focus on potential rate cuts is influenced by comments from Fed Governor Christopher Waller and other officials, with market pricing indicating a potential rate cut in March 2024 despite officials' reluctance to discuss policy easing.

Fed Chair Powell's Cautious Approach