Wash "Rate hike decision was made by the Fed... not driven by the market"

Wash "Rate hike decision was made by the Fed... not driven by the market"

"Reliance on individual data is a dangerous obsession... trends are important"

Kevin Wash, Chairman of the US Federal Reserve (Fed), emphasized on the 16th (local time) that the decision to raise the benchmark interest rate was an independent decision, not one influenced by market conditions.

Chairman Wash gave this answer when a Fox Business reporter at the press conference after the rate decision announcement asked if the market had driven the rate hike, given that a 90% probability of a rate hike was reflected in the market that day.

Chairman Wash said, "Again, the Fed has immense power, and these decisions are ours to make," adding, "However, coordinating mutual understanding between the financial market and the Fed correctly is a matter that requires balance, and I have long believed that this balance could be better achieved than it is now."

He continued, "Today's decision was based on an assessment of the situation, an analysis of employment trends, and a judgment on the health of the economy. Sometimes the market tries to preempt our decisions. I also observe market prices to see what signals the market is sending. But today's decision was made by us," he confirmed.

He also stated that they do not rely solely on data when making interest rate decisions.

He said, "As you know, I am not someone who relies solely on data. Therefore, we will not react in any particular way based on the data that appears before us."

When asked if the market's high interest in the August consumer price index ahead of this meeting was appropriate, Chairman Wash responded, "Market participants seem to have become accustomed to holding their breath and waiting for a single piece of data over the past decade. But that is not my perspective. I did not hold my breath and wait for any specific data, whether it was the retail sales figures released this morning or the CPI figures released last week."

He added, "Trends are important, and individual data points are noisy. Relying on individual data is a dangerous obsession."

In his opening remarks at the press conference that day, Chairman Wash once again emphasized the principles of monetary policy.

He clarified, "In my Jackson Hole speech, I stated my commitment to adhering to the principles of monetary policy, not just the rate decision itself. I set a standard for action: that we must be confident that underlying inflation is moving towards our target at a clear and sufficient pace."