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  • Powell: Recent readings on job gains and inflation higher than expected but do not materially change overall picture
  • If economy evolves as Fed expects, most FOMC participants see it likely appropriate to begin cutting rates this year
  • Too soon to saw whether recent inflation readings are more than just a bump
  • Fed has time to let incoming data guide its policy decisions, we're deciding meeting by meeting
  • Outlook is still uncertain, Fed faces risks on both sides of his mandate
  • Labor market rebalancing seen in data on quits, job openings, employer and working survey and continued gradual decline in wage growth
  • Economy still one of solid growth, strong but rebalancing labor market, inflation moving down to 2% on a sometimes bumpy path
  • Full text

Here were Powell's comments from Friday.

The comment about not materially changing the picture is notable but that could simply mean that the picture is the same but it will take longer for cuts, which is exactly what he's saying. June right now is at 55% and that sounds about right given today's softer ISM. However there will be a big swing based on Friday's non-farm payrolls report.


This paragraph is the important one in the speech:

The recent data do not, however, materially change the overall picture, which continues to be one of solid growth, a strong but rebalancing labor market, and inflation moving down toward 2 percent on a sometimes bumpy path. Labor market rebalancing is evident in data on quits, job openings, surveys of employers and workers, and the continued gradual decline in wage growth. On inflation, it is too soon to say whether the recent readings represent more than just a bump. We do not expect that it will be appropriate to lower our policy rate until we have greater confidence that inflation is moving sustainably down toward 2 percent. Given the strength of the economy and progress on inflation so far, we have time to let the incoming data guide our decisions on policy.