Reply To: Federal Reserve Raises Rates 25bps as Expected, Inflation has Eased Somewhat but Remains Elevated


Powell opening statement:

“The inflation data in October and November show a welcome reduction. But it will take substantially more evidence to give confidence that inflation is on a sustained downward path.”

Without price stability, there is no sustained strong jobs market
US economy has slowed significantly from last year
We’ve covered a lot of ground, full effects of tightening yet to be felt
Higher rates appear to be weighing on business investment
Labor market remains extremely tight
Inflation remains well-above long run goal of 2%
It will take ‘substantially more evidence’ to give confident that inflation is on a sustainable downward path
Participants still see inflation risks as to the upside
Stable inflation expectations aren’t grounds for complacency
We are seeing the effects of higher rates in the most-sensitive areas like housing
We still have “some ways to go” on rates
We will stay the course until the job is done
Historical precedence argues against loosening prematurely