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.