Fed's Powell is likely to repeat most of what he said during his day one testimony in the Senate yesterday. The faces are different with House banking committee representatives providing the questions to the Fed chair:
- Dual mandate has served us well.
- On the balance sheet runoff, the Fed has made quite a lot of progress but there still is a ways to go.
- It is hard to pick a precise stopping point but want a bit of a buffer. Going slower could allow them to go further
- Policy is currently restrictive. The neutral rate must have moved up at least in the short term.
- The fiscal path is unsustainable.
- Inflation caused by very strong demand and constrained supply.
- We have observed a waning of demand with increase in supply and inflation has come down.
- Economy is growing around 2%, it feels like and with inflation in jobs these are good numbers.
- Fed does not want to wait until inflation reaches all the way down to 2% to ease polity
- Chair is not sending any signals on policy decisions
- We want to have greater confidence which means more good inflation readings
- We are not just an inflation targeting central bank, we have an employment mandate
- Now the risks of the two mandates much closer to being in balance. We are looking at both sides.
- Inflation has come down but prices are still high
- I do have some confidence in inflation going down, but not prepared to say sufficiently confident in it coming sustainably down to 2% yet
- We are going to return to 2% inflation, I am reasonably confident
- There is a path to price stability and at the same time, keeping unemployment down
- Our undertaking is to make decisions when and as they are needed
- Fed policy is restrictive, but not intensively restrictive which suggests that the neutral rate is a little higher than before
- I have some confidence inflation is on a downward path. We need to finish the job on inflation while keeping a strong labor market.
- What keeps the Fed Chair Powell that night? Getting policy right on inflation and the job market
- inflation expectations of measures and suggest around 2%
How's testimony ends at 1:05 PM ET after three hours of grueling testimony.
