Powell answers questions from the media
Gradual hikes limit long and variable lag issues
We don't consider political factors
We take broader financial conditions into account
Some participants have very modest overshoots of neutral in 2020 and beyond
We go into each meeting, it's hard to be confident that far into the future
We're trying to balance between moving too fast and too slow
I'm in the camp of seeing financial vulnerabilities as moderate
On trade our contacts worry about supply chains
The big question is the long term and where this leads, if it ultimately leads to lower tariffs overall, that's good
If you look at aggregate performance, then it's hard to see much [tariff] impact so far
This is a pretty good moment for the economy
Too early to see supply-side effects from tax cuts; hope they come
If inflation surprise to the upside, we could move faster but "we don't see that, we really don't see that"
Would slow or stop hikes if financial markets fell or the economy unexpectedly slipped
Labor force participation has surprised us on the upside
We're hearing a lot talk on labor shortages but we're not seeing it yet in the data
The useful life of 'accommodative' has passed. We were messaging then that we weren't hiking to cool the economy. That purpose has been served.
The Fed funds rate is still below the longer-run neutral rate of every single participant
Policy is still accommodative but we don't want to suggest that we know where neutral is
We plan to stay on this path and looking at data, that means less thinking about precisely where neutral is
Dollar has only partially recovered decline of 2017
Wages and benefits at +3%, inflation about 2%
By some measures, stocks are high historically
On accommodative. Powell is making the Frankenstein argument. Basically saying they created a monster and are trying to kill it. They just want to focus on data and stay on path, evaluating as they go. Still, there is a path and it's towards higher rates and it sounds like the path is to hike at the current pace until they see a reason not to.
Bottom line: The plan is to hike at the current pace until they see a reason not to. Neutral/acommodative argument less important. Overall, that's hawkish.
That wraps it up.
