Powell Signals Slower Hikes at Brookings
What Happened
On November 30 Chair Powell said the Fed could moderate the pace of hikes “as soon as the December meeting” while warning that rates might ultimately run higher. Markets seized on the slower-pace line; stocks jumped and the dollar weakened into the close.
What It Means
Communication nudged expectations toward 50 bps in December and softer steps afterward. The speech underscored the shift from outsized moves to fine-tuning, even as the committee tried to keep terminal expectations firm.
What I Think
Powell needed to open the door to smaller increments without loosening financial conditions too much. The market heard what it wanted. I expect more volatility around speeches as traders parse every adjective for hints of an eventual pause.
Market Terms
- Slower-pace hint – Powell flagging smaller moves ahead.
- Terminal higher caveat – Warning that rates may still end up above prior peaks.
- Risk rally reaction – Equities jumping and the dollar weakening on the tone.
- Speech-driven volatility – Markets parsing language for pause timing.
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