Comments from Powell in Paris:
- US growth appears to have moderated
- Repeats that uncertainties are viewed around trade and global growth
- Fed saw core PCE running at 1.7% y/y in June
- Baseline Fed outlook is for US growth to remain solid but uncertainties have increased
- Overall US growth appears to have moderated in Q2
- Long-run factors contributing to lower interest rates, growth and inflation likely to persist
- Manufacturing sector has been weak since the start of the year
- Growth in US consumer spending appears to have bounced back but business investment growth has slowed notably
Powell reiterated his pledge to act appropriately to support the US economy and that the central bank is 'carefully monitoring' downside risks. He said that the FOMC has "raised concerns about a more prolonged shortfall in inflation below our 2% target."
His comments are essentially a repeat of what he said last week and that isn't a surprise given the short turnaround. In any case, gold like the reminder that lower rates are coming and has recoped the drop down to $1402 in a rebound to $1411.
