Powell today
- Six month data on inflation is good enough but we have to have confidence it will continue
- We had very strong growth last year
- A lot of the improvement in data has been from goods, eventually that will level out and we'll need to see more from services
- We need to see more evidence that confirms what we think we're seeing
- "We want to see more good data... not looking for better data... more good data..."
- Almost every participant on the committee does believe it will be appropriate to lower rates
- An unexpected drop in unemployment would 'absolutely' argue for cutting sooner
- There was no proposal to cut rates today. There's a wide disparity about when to cut
- The jobs market is rebalancing, it will probably take a couple years for for wages to normalize
- We're not looking for inflation to anchor below 2%
- We want to finish the job on inflation while keeping the labor market strong
- Overall it's a pretty good picture on the economy
- I don't think it's likely we will have enough confidence to cut in March, I don't think that's the base case
- We won't keep it a secret when we have confidence on inflation
- I really like anecdotal data, and in chats with business there are signs of re-acceleration
- I'm not so worried that growth is too strong and inflation could come back
- Continued declines in inflation are what we're looking at
The US dollar initially reversed back near the lows of the day as Powell spoke but then jumped when he pushed back on March.
The message here is that nothing needs to 'crack' to cut rates... just more of the same is enough. Moreover, a soft Jan or Feb jobs report and they're sharpening the axe.
