The Fed is determined to tighten its monetary policy despite the trade war on several fronts at once, the global economy slowdown and even the Christmas preparations. Fed Chairman Jerome Powell promised that the rate would be lifted. The official gives an upbeat assessment of the US economy and believes that it is strong enough for an interest rate hike. “I am very happy about the state of the economy now. Our policy is part of the reason why our economy is in such a good place right now,” Powell said.

This speech can hardly be called fundamental; it is more of a warm-up before the main event of the year - the annual speech of the Fed head before Congress in December. This speech is crucial in predicting further actions of the regulator. However, one thing can be said for sure - the Fed does not plan to stop there and, apparently, is ready to continue to blow off financial market bubbles. If the world economy slowdown is a factor of low importance for Powell, then the war of tariffs can have a noticeable impact on the Fed policy.

The trade conflict escalation may provoke a high jump in inflation, but it is still early to talk about it, and the Fed is committed to the wait-and-see approach. The Fed governor also mentioned the pressure from Donald Trump, who had repeatedly criticized the regulator for excessively tight monetary policy. Nevertheless, markets can rest assured that the regulator will remain independent, according to Powell.