Powell Q&A: We don't see a strong case for moving in either direction
Powell answering questions
- We see good reasons to believe the low inflation prints in Q1 will be transitory
- Cites Dallas Fed trimmed mean at 2%
- Repeats "we don't see a strong case for moving in either direction"
- IOER move "really has no implications for policy"
- There are some concerns about non-financial corporate debt
- Households are in good shape from a leverage perspective
- We don't feel like the data is pushing us in either direction
- Says doesn't take Trump comments into account
- Manufacturing has been weak all around the world
- ISM manufacturing is still positive and we expect some positive contribution from manufacturing
- Will look at a repo facility at a future meeting
- "We don't see any evidence at all of overheating"
- Wages are moving up as you would expect but not signaling overheating
There's an open question about whether the Fed is worries about inflation persistently below 2% and he's been grilled on it. So far, he's not giving up any ground but there's a bit of a groundswell pushing for the Fed to let inflation run above 2% to regain some credibility.
Powell is taking some heat for pushing the 'transitory' angle and even for taking a victory lap on cell phone prices. The bottom line is that inflation has been on target for about 2 months in the past 10 years. That's a lot of transitory events.