Powell smiling at Spelman
  • It's premature to say that mon pol is restrictive enough
  • Fed will raise rates if needed to lower inflation
  • Fed is making rate decisions meeting by meeting
  • Uncertainty over economic outlook is 'unusually elevated'
  • Fed funds range well into restrictive territory
  • Fed has made considerable progress in lowering inflation
  • Welcomes recent softening in inflation data
  • Need to see more progress on lowering inflation to 2%
  • Wage growth still high but moderating to more sustainable levels
  • Unemployment up but still historically low
  • As the demand- and supply-related effects of the pandemic continue to unwind, uncertainty about the outlook for the economy is unusually elevated
  • Full text

Powell isn't saying that rate hikes are done, but he's close.

Key line:

"It would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance, or to speculate on when policy might ease. We are prepared to tighten policy further if it becomes appropriate to do so."

The dollar isn't doing much with this. The comments from Daly and Williams yesterday were a preview of what was coming here so this shouldn't be a surprise and the market is taking it in stride. There's a Q&A coming up afterwards.

The market is pricing in 119 bps in cuts next year, which is the same as before he spoke. Where it really gets interesting now is March, where there's a 60% chance of a cut priced in -- that's aggressive.