Powell May 4 2022

Powell started by saying he wanted to speak directly to American people and started with "inflation is too high"

  • Inflation is much too high
  • The labor market is 'extremely' tight
  • Wages are rising at the fastest pace in many years
  • It's essential we bring inflation down to keep a strong labor market
  • Price pressures have spread to a broader range of goods and services
  • Lockdowns in China are likely to further snarl supply chains
  • There is a broad consensus that 50 bps hikes should be on the table at the next couple meetings
  • We are prepared to adjust any of the details or our approach
  • Further surprises could be in store

The hawkish comments are causing a quick reversal in sentiment. Later, as he said 50 bps hikes are on the table for the next couple of meetings, that was tempered. The subtext being that it's only a 'couple' meetings and not 75 bps. He will be asked about that in the Q&A.