The expert noted the Fed's willingness to respond to the deterioration of employment conditions in the United States.

The speech of the head of the US Federal Reserve, Jerome Powell, at a press conference following the meeting once again confirmed that the Fed is ready to respond in a timely manner to a possible deterioration in employment conditions. This was stated to Izvestia by Freedom Holding strategist Georgy Masa Timoshin.

"This means that the regulator will no longer reduce market liquidity by reducing the balance sheet volume. Powell noted that the Fed's balance sheet has already been significantly reduced: from 35% to 21% of GDP, and the cumulative volume of cuts over the past 3.5 years has amounted to about $2.2 trillion," Timoshin explained.

According to the current QT plan, the monthly reduction was about $35 billion for MBS and up to $5 billion for Treasury securities. The expert clarified that this rate of "winding down" is close to the minimum, so it can be assumed that the effect on liquidity will be limited.

The balance of risks has shifted towards the labor market, while inflationary risks remain, but remain under control. Thus, the Fed is ready to respond in a timely manner to a possible deterioration in employment conditions. Powell stressed that economic activity remains moderate, consumer spending is stable, and there are no signs of recession," the strategist added.

Timoshin stressed that the regulator remains flexible: monetary policy is not on autopilot, and further rate cuts in December are not predetermined. As Powell noted in his speech, some of the macroeconomic data is delayed due to the US government shutdown, which increases uncertainty in assessing the current dynamics. Despite the fact that the markets took the rhetoric cautiously negatively at the moment, the main indexes ended the day in different directions.

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On October 29, the Fed lowered its benchmark interest rate for the second time in a row, reducing the target range by 0.25 bps to a range of 3.75–4%. It was also announced that the quantitative tightening program (QT) will be completed on December 1.

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