Federal Reserve Chair Jerome Powell is speaking at the San Francisco Fed in a moderated discussion with Marketplace host Kai Ryssdal. This page will be updated live with new comments as they come.
Says today’s data was ‘good to see’To get confidence on inflation we want to get more good reading on inflation like the ones last year
I find it notable that he didn’t highlight this report but ‘last year’.
We didn’t overreact to good data in H2 last yearYou won’t see us overreacting to the last two months’ dataRisks are too sided, the first cut is a very important decisionThe economy is strong, we see very strong growthWe don’t need to be in a hurry to cutWe’ve divided our critics into equal-sized pilesMonetary policy is well-placed to react to different dataI have scheduled calls with every voter and non-voter before every meeting, sometimes twice
There is a slightly-more hawkish tone from Powell. He hasn’t yet said they’re on track to cut rates this year.
We would hold rates for longer if inflation doesn’t come down (note, no reference to hikes)We expect inflation to come down as our base caseWe don’t know where rates are going back to when this whole thing is overMy own expectation is that we won’t get to the very low levels before the pandemic (rates were at 1.50-1.75% in late 2019)If we were to see unexpected weakness in labor market that could draw a policy responseSlowing balance sheet runoff is not in any way related to a view of the economy
This article was written by Adam Button at www.forexlive.com.