Fed's Powell: We didn't expect the jobs report to be this strong

• Labor market is extraordinarily strong
• Sometimes just I get data the night before it's released, but just me
• Message from last week's FOMC is that disinflationary process has begun but has a long way to go
• Repeats that ongoing rate increases will be appropriate, still have not reacted sufficiently restrictive level
• Vote on monetary policy takes place around noon on the second day of FOMC
• My guess is that it will take this year and next year to get down to 2%
• There is now a shortage of workers in the US and 'it almost feels structural'
• The labor market is 'at least' at maximum employment
• Notes that he has regular conversations with most major central banks
• The biggest challenge we face at the Fed is completing the challenge of getting inflation back to 2%
• Repeats that they're not seeing deflation in core services and that they will need to keep rates high to do it
• We're not seeing disinflation in housing but expect to see that happen
• Wants to see disinflation in core services ex-housing, says that's what he worries about
• We still expect that the labor market will soften
• The reality is that we're going to react to the data, if we get stronger data, we could raise rates higher than we expect

The market likes what it has heard so far with stocks rallying to session highs, led by the Nasdaq NASDAQ The Nasdaq Stock Market or NASDAQ is an American stock exchange. It trails only the New York Stock Exchange (NYSE) in market capitalization and is part of a network of stock markets and options exchanges.Launched back in 1971, NASDAQ is the acronym for the National Association of Securities Dealers Automated Quotations. Since then it is known simply as NASDAQ and has become one of the most influential exchanges worldwide.The NASDAQ was the world’s first electronic stock market, and has since ass The Nasdaq Stock Market or NASDAQ is an American stock exchange. It trails only the New York Stock Exchange (NYSE) in market capitalization and is part of a network of stock markets and options exchanges.Launched back in 1971, NASDAQ is the acronym for the National Association of Securities Dealers Automated Quotations. Since then it is known simply as NASDAQ and has become one of the most influential exchanges worldwide.The NASDAQ was the world’s first electronic stock market, and has since ass Read this Term. The US dollar US Dollar The US dollar, (symbol $, code USD) is the fiat currency of the United States of America (USD) and the most widely traded currency globally. It was introduced into the US in the late 18th Century, with paper notes not being distributed until the following century. The US dollar, also informally known as the greenback, is the world’s most foremost reserve currency, due in large part to the importance of the US economy on the world stage. Once backed by gold (in the 1900’s), the USD is now a purel The US dollar, (symbol $, code USD) is the fiat currency of the United States of America (USD) and the most widely traded currency globally. It was introduced into the US in the late 18th Century, with paper notes not being distributed until the following century. The US dollar, also informally known as the greenback, is the world’s most foremost reserve currency, due in large part to the importance of the US economy on the world stage. Once backed by gold (in the 1900’s), the USD is now a purel Read this Term has sunk across the board.

The fear was that he would offer up some more-aggressive guidance and start to talk about rates getting close to 6%. He certainly didn't take that off the table but there's no big hawkish shift here and that's what the market is responding to.

Update: The bolded comment near the end of the speech sapped some of the initial moves.