Key comments from Mario Draghi and Jerome Powell in Sintra
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- The US Federal Reserve chairman Jerome Powell reiterated his stance of gradual monetary policy normalization in the US.
- The ECB President Mario Draghi also used the central bankers’ gathering in Sintra to confirm the message from last ECB Governing Council meeting that although asset purchasing will end in December, the ECB will remain vigilant with monetary policy accommodation, meaning the interest rates will remain low for at least first half of 2019.
While speaking in central bankers’ symposium in Sintra, Portugal, the world’s most important central bankers governors failed to surprise the markets and mostly reiterated their key policy messages from their last meetings.
Fed’s chairman Jerome Powell
- Federal Reserve chairman Jerome Powell repeated that the case for gradual interest rate increases is strong.
- Moderate wage growth suggests jobs market is “not excessively tight.”
- Powell also pointed out that flatter Phillips curve suggests it is possible that impact on inflation of unemployment below natural rate for an extended period "might not be large."
- Powell said the US economy is performing very well and the US job market is likely to strengthen further.
ECB President Mario Draghi
- The ECB President Mario Draghi said factors holding back wage growth are gradually waning.
- Draghi says see unit labor cost on the upward path and he is confident that inflation converging towards the inflation target.
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