- FOMC sees significant under use of labour resources
- There is no simple recipe for appropriate policy
I’ll add the remaining comments but there’s nothing shocking here in the first headlines, even with the rate rise sooner comment. USD/JPY pushed to 103.94. She’s even quoted some lines straight from the FOMC statement
- Still unclear on degree of level of labour slack and how quickly it will disappear
- Gauging labour market slack needs to be more nuanced
- Repeats that QE will finish in October
- Slower progress on goals may delay rate increase
- Sees room for wage increases that don’t boost inflation
- Tightening policy too soon as inflation moves towards 2% might prevent labour market from fully recovering
- Emphasis shifting to determining what labour conditions would bring about less accommodation
- Fed needs to make difficult judgements about cyclical structural influences on labour market
- Need to urge caution in judging whether recent wage data points to weaker labour conditions than indicated by unemployment rate
- Could reasonably expect any further increases in labour demand to pull a sizeable share of discouraged workers back into the labour force