“Skip” may be all the rage at the US central bank and on bond-trading floors across Wall Street, but Federal Reserve Chair Jerome Powell is not a fan.
(Bloomberg) — “Skip” may be all the rage at the US central bank and on bond-trading floors across Wall Street, but Federal Reserve Chair Jerome Powell is not a fan.
Powell corrected himself Wednesday during a press conference after referring to the Fed’s decision to pause interest-rate increases as a skip.
“If you think of the two things as separate variables, then I think the skip — I shouldn’t call it a skip — the decision makes sense,” he told reporters, referring to the speed at which the Fed raises its benchmark rate versus the level to which it will raise it.
The US central bank’s policy-setting Federal Open Market Committee voted Wednesday to put its tightening campaign on pause following rate hikes at each of its 10 previous meetings.
The target range for its benchmark rate now stands at 5-5.25%, and new projections published with the decision showed the median FOMC participant expected it would be appropriate to raise rates by an additional half-percentage point this year.
Some Fed officials in recent weeks had taken to referring to a potential decision to leave rates unchanged in June as a “skip” rather than a “pause,” emphasizing the likelihood that they would continue raising rates again at future policy meetings.
“It may make sense for rates to move higher, but at a more moderate pace,” Powell said Wednesday.
“The committee decision made today was only about this meeting. We didn’t make any decision about going forward, including what would happen at the next meeting,” he said. “We did not decide, or really discuss, anything about going to an every-other-meeting kind of an approach.”
(Updates with additional quotes from Powell.)
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