current fed chair jerome powell and former fed chair ben bernanke both appeared at the thomas laubach research conference on friday offering monetary policy remarks price stability is the cornerstone of an economy powell said in his opening comments adding that the fed is strongly committed to returning to the 2 goal inflation in nonhousing services persists the fed chair highlighted   powell suggested that interest rates may not need to climb as high as they would otherwise due to tightening bank lending conditions but he also said that banks and the banking system are strong and resilient and they can deal with these and other challenges in the future as policy has become more restrictive the risk of doing too much than doing too little is becoming more balanced now but we havent made any decisions yet the fed chair stated market expectations for a june rate hike plummeted on friday after republican senior debtceiling negotiators withdrew from a meeting with white house officials putting the status of discussions to prevent a us default in jeopardy traders currently assign a 15 probability for a june hike as compared to a 45 probability earlier on friday treasuries which are tracked by the ishares us treasury bond etf govt rebounded as yield fell across the board stocks flipped to losses with the spdr sp 500 etf trust spy down 03 according to bernanke the current financial crisis caused by silicon valley banks failure is considered a classic situation where assets were exposed to danger in the case of interest rates the bank run accelerated because socialmediasavvy consumers rapidly withdrew their money it ultimately affects credit conditions but borrowers are in a much better shape today compared to the past great financial crisis that makes a big difference on the impact of consumer spending and the economy in general powell said that disinflationary supply shocks of the past do not appear to be repeated after the disruptions caused by the pandemic and the conflict in ukraine we dont know whether globalization will be partially or completely reversed powell said adding that what a central banker can do is control inflation even if supply shocks occur the pandemic scrambled the usual signals between the labor market and inflation bernanke said due to supply shocks and inflation expectations  powell indicated that the fed has been looking at different job market indicators other than the unemployment rate such as the number of unemployed persons per job opening to gauge labor market tightness photo courtesy of international monetary fund and medill dc on flickr