- If it becomes appropriate to tighten policy further, 'we will not hesitate'
- We will continue to move carefully, decide meeting by meeting
- Attentive to risk that stronger growth could undermine inflation progress, which could warrant a monetary policy response
- We expect GDP growth to moderate in coming quarters, but remains to be see
- Labor market tight, but coming into better balance
All week, Fed officials have been trying to push back on dovish market pricing and the market ignored it. Now Powell has re-emphasized some of his more-hawkish points from the Fed press conference and the market is listening. The US dollar has jumped on the headlines.
I spoke with Reuters earlier and said:
“There was a pushback from Fed officials to try to reprice something a bit more hawkish - the Fed doesn’t want to let go of optionality in December or January for a hike,” said Adam Button, chief currency analyst at ForexLive in Toronto.
“I wonder if Powell doesn’t take another stab at that or lean a bit harder into the messages that we heard from several of them,” he added.
