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Powell Speech:
Inflation is much too high
Business fixed investment looks to have declined in Q2
Labor market is extremely tight
Wage growth is elevated
Price pressures are broad
Although prices for some commodities have turned down, earlier surge has boosted prices and inflation pressure
There is still additional upward pressure on inflation
We’re highly attentive to inflation risks
We are looking for compelling evidence of inflation coming down
The pace of hikes will continue to depend on incoming data and evolving outlook
Another unusually large increase could be appropriate but it’s dependent on data between now and then
Inflation has surprised to the upside in the past year so we will need to be nimbleQ&A
We will make decisions meeting-by-meeting now
We will ask if we’re seeing a slowdown in economic data that we think we need? We think we’re getting some evidence now
We will be watching both core and headline inflation and what they say about the outlook
We need to get policy to at least a moderately restrictive level
We think it’s time to go to a meeting by meeting basis and not provide clear guidance
We have to take estimates of where rates will be next year with a grain of salt
3.00-3.50% is what the SEP says on a moderately restrictive stance at year end
Latest inflation report was worse than expected
By Sept, we’ll have more inflation data in hand
Will ask ourselves ‘are we confident that inflation is on the way to 2%?’Fed’s Powell: Cannot Predict MonPol Rate Range For Next Year
– To Offer Less `Clear Guidance’ On Rate Moves
– Our Thinking Is That We Want To Get To Moderately Restrictive Level By End 2022, Meaning Means 3% – 3.5%JP Morgan “expect another outsized #Fed hike in September, but post that we would look for the Fed not to surprise the markets on the hawkish side again”
The Federal Reserve again raised rates by 75 bp at their September meeting. The market was pricing in 84.0% for 75 bps and 16.0% for 100 bps. It was a
[See the full post at: Hawkish Federal Reserve Again Raises Rates 75bps as Expected, March 23 Terminal Rate Higher]
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