Jerome Powell’s Commitment to Curb Inflation: The Impact on Future Monetary Policies

Jerome Powell, the Chairman of the U.S. Federal Reserve, has reiterated his institution's firm commitment to countering inflation. This statement was made during his speech at the Economic Club of New York. Powell hinted at potential increases in interest rates if inflation continues to be a pressing concern.

Powell Shows Green Light for More Monetary Stringency As Focus on Inflation Intensifies

During his speech, Powell emphasized that despite a recent decrease, inflation levels remain troublingly high. Although both headline and core PCE inflation have decreased from their peak levels earlier this year, Powell expressed that it's premature to assume that inflation will stabilize at the Federal Reserve's target of 2%.

According to Powell, "The journey might be challenging and time-consuming, but my colleagues and I share a common objective of decreasing inflation to a sustainable 2 percent". He went on to address how tightening financial conditions are exerting a downward influence on inflation rates.

Potential for Further Policy Tightening

Powell cautioned that continuous economic growth or a tight employment market might necessitate additional policy stringency. He stated, "If there is evidence of consistent above-trend growth, or that the labor market's tightness is not receding, it could jeopardize further progress on inflation and could call for further monetary policy tightening".

Powell stressed that long-term Treasury yields have experienced a sharp increase, thus tightening financial conditions. He reassured that the central bank is closely monitoring these developments. He noted, "We are keeping a close eye on these developments because enduring changes in financial conditions can influence the trajectory of monetary policy".

The Impact on Treasury Yields and Anticipation of Rate Hikes

This week, the 10-year Treasury yield soared to a 16-year high of 4.9%. The CME Fedwatch tool indicates a 99% probability that a rate hike will occur next month, following Powell's statements. Investors are anticipating that the Federal Reserve will implement another 0.25 percentage point rate increase at its November meeting.

The Federal Reserve's Stance on Inflation

Powell emphasized the Federal Reserve's unwavering dedication to curbing inflation, aiming to reach the central bank's 2% target in the long term. In essence, he implied that the Federal Reserve would maintain a "restrictive policy until we are sure that inflation is on track to achieve this objective".

The Market Response to Powell's Remarks

Powell's statements led to a downturn in all four U.S. benchmark stock indices. On the contrary, precious metals experienced a slight increase, while the cryptocurrency markets were largely unaffected by Powell's comments. The drop in U.S. equities was attributed to Powell's speech in New York.

What are your thoughts on Powell's recent statements at the Economic Club of New York? We welcome your insights and views on this topic in the comments section below.

Frequently Asked Questions

How is gold taxed by Roth IRA?

An investment account’s tax rate is determined based upon its current value, rather than what you originally paid. If you invest $1,000 in mutual funds or stocks and then later sell them, all gains are subjected to taxes.

However, if the money is deposited into a traditional IRA/401(k), the tax on the withdrawal of the money is not applicable. Taxes are only charged on capital gains or dividends earned, which only apply to investments longer than one calendar year.

These rules vary from one state to another. Maryland is an example of this. You must withdraw your funds within 60 calendar days of turning 59 1/2. Massachusetts allows you to wait until April 1. And in New York, you have until age 70 1/2 . To avoid any penalties, plan your retirement savings and take your distributions as early as possible.

How is gold taxed within an IRA?

The fair market value of gold sold is the basis for tax. When you purchase gold, you don’t have to pay any taxes. It isn’t considered income. If you decide to sell it later, there will be a taxable gain if its price rises.

For loans, gold can be used to collateral. Lenders look for the highest return when you borrow against assets. Selling gold is usually the best option. The lender might not do this. They might keep it. They may decide to resell it. Either way, you lose potential profit.

You should not lend against your gold if it is intended to be used as collateral. Otherwise, it’s better to leave it alone.

How to Open a Precious Metal IRA

It is important to decide if you would like an Individual Retirement Account (IRA). To open the account, complete Form 8606. You will then need to complete Form 5204 in order to determine which type IRA you are eligible. This form should be filled within 60 calendar days of opening the account. Once this is done, you can start investing. You might also be able to contribute directly from the paycheck through payroll deduction.

Complete Form 8903 if your Roth IRA option is chosen. Otherwise, the process is identical to an ordinary IRA.

To qualify for a precious-metals IRA, you’ll need to meet some requirements. The IRS says you must be 18 years old and have earned income. You can’t earn more than $110,000 per annum ($220,000 in married filing jointly) for any given tax year. Contributions must be made regularly. These rules are applicable whether you contribute through your employer or directly from the paychecks.

You can use a precious-metals IRA to purchase gold, silver and palladium. However, physical bullion will not be available for purchase. You won’t have the ability to trade stocks or bonds.

To invest directly in precious metals companies, you can also use precious metals IRA. This option can be provided by some IRA companies.

There are two major drawbacks to investing via an IRA in precious metals. First, they’re not as liquid as stocks or bonds. It’s also more difficult to sell them when they are needed. Second, they don’t generate dividends like stocks and bonds. You’ll lose your money over time, rather than making it.


  • The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (
  • If you take distributions before hitting 59.5, you’ll owe a 10% penalty on the amount withdrawn. (
  • (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (
  • Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (
  • Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (

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Gold IRAs are a growing trend

The gold IRA trend is growing as investors seek ways to diversify their portfolios while protecting against inflation and other risks.

The gold IRA allows owners to invest in physical gold bullion and bars. It is tax-free and can be used by investors who aren’t concerned about stocks and bond.

An investor can use a gold IRA to manage their assets and not worry about market volatility. Investors can protect themselves from inflation and other possible problems by using the gold IRA.

Investors also have the benefit of physical gold, which has unique properties such durability, portability and divisibility.

Additionally, the gold IRA has many benefits. It allows you to quickly transfer your gold ownership to your heirs. The IRS doesn’t consider gold a commodity or currency.

All this means that the gold IRA is becoming increasingly popular among investors seeking a haven during financial uncertainty.


By: Jamie Redman
Title: Jerome Powell’s Commitment to Curb Inflation: The Impact on Future Monetary Policies
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Published Date: Thu, 19 Oct 2023 21:30:48 +0000

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