Powell March 8 2023
  • We've had our eyes on the whole housing inflation thing from the beginning
  • Regarding the transitory mistake says 'if we ever see this pitch again, we'll know how to swing at it'
  • The cost of failure to control inflation would be extremely high
  • China faster reopening isn't expected to be a big net effect on the US
  • We expect China's impact to be moderate overall
  • Notes that oil prices could be affected by China reopening and notes that it's more of a concern for Europe
  • As shortages and supply chain issues get better, we'll see corporate margins come down
  • Most of the inflation comes from the service sector.

This statement is getting some attention:

"As I mentioned in my testimony, the data we've seen so far this year suggests that the ultimate level of rates will need to be higher, but we still have some more data to come in before the meeting. But as of today, it suggests a higher level than that."

Compared that with his testimony, which said:

" The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated."

I don't see a difference there but he certainly isn't pushing back against market pricing that shows a 5.63% terminal rate. It's safe to mark down 5.50-5.75% for now but even if that's the consensus of the dots, it will be interesting to see where the weight of the outliers is.