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Powell finally sent the right message at Jackson Hole about the central bank’s commitment to fighting inflation

Federal Reserve Chair Jerome Powell has sent the right message to markets about the central bank’s resolve in tamping down inflation, according to top economist Mohamed El-Erian who also Powell’s Jackson Hole speech failed to address past policy mistakes.

  • Fed Chair Powell “finally sent the correct message,” to markets about inflation, Mohamed El-Erian said.
  • Investors are taking notice as Powell mentioned inflation 45 times during his eight-minute address Friday.
  • But Powell didn’t address policy errors in his speech, the Allianz advisor said.

Federal Reserve Chair Jerome Powell has sent the right message to markets about the central bank’s resolve in tamping down inflation, according to top economist Mohamed El-Erian who also Powell’s Jackson Hole speech failed to address past policy mistakes.

“He finally sent the correct message. He should have done that months ago,” El-Erian said in a CNBC interview on Monday. “He was unambiguous. He was clear, he stuck to his script, and he did it in eight minutes. And the market is starting to realize that when your Fed chair mentioned inflation 45 times in eight minutes, something is changing. That’s the good news.”

US stocks were falling on Monday, building on Friday’s selloff as investors braced for further Fed hawkishness in the wake of Powell’s symposium speech in Jackson Hole, Wyoming. Powell said the Fed’s fight against high inflation will bring “some pain” to American households, as price stability is key to maintaining the strong US labor market.

Related video: Jackson Hole a ‘Huge’ Challenge for Fed’s Powell:https://www.msn.com/en-us/video/money/jackson-hole-a-huge-challenge-for-feds-powell-el-erian/vi-AA115Eob?cvid=5ac9c7881d9d48178bc1d0df32d5663d&category=foryou

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