[CNBC Television] How to play the 10-year ahead of Fed chair Jerome Powell’s speech
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CNBC’s Brian Sullivan discusses the bond market ahead of Federal Reserve Chairman Jerome Powell’s annual Jackson Hole speech, which will be held virtually amid the pandemic. For access to live and exclusive video from CNBC subscribe to CNBC PRO:
History will remember Paul Volcker and Jerome Powell as standing on the opposite ends of the inflation canyon, with the former taking desperate actions to try to tamp it down and the latter expected this week to announce an unprecedented effort to crank it back up.
Volcker, the Federal Reserve chairman from 1979-87, ushered through a series of inflation-busting interest rate hikes that dragged the country into recession but won the fight against pricing pressures and spurred a powerful economic recovery.
Powell, the central bank chief since 2018, is likely to detail a set of measures aimed at pushing inflation higher amid a coronavirus pandemic that has dragged the U.S. economy into one of its darkest hours.
While the average consumer might find it absurd to want to raise the cost of living, central bankers and economists see too little inflation also as a problem. It often reflects a slow-moving economy with a low standard of living. On top of that, the accompanying low interest rates give policymakers little wiggle room when crises happen and there’s a need to loosen policy.
That’s why Powell, who will speak Thursday during a virtual version of the Fed’s annual Jackson Hole, Wyoming, conference, will outline what could be the central bank’s most active efforts ever to spur inflation back to a healthy level. The speech is titled “Monetary Policy Framework Review” and wraps up a yearlong examination both among central bank officials and with the public, during a series of open events, on what policy should look like in the future.
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