Highlights from Fed Powells prepared remarks to Congress
- Uncertainties since June FOMC continued to dim outlook
- it appears training uncertainties and concerns about global economy continue to weigh on US economic outlook
- Fed will act as appropriate to sustain US economic growth
- baseline outlook for US economic growth remained solid, labor markets to stay strong and inflation to move back up to central bank's 2% target
- there is a risk weak inflation will be even more persistent than Fed currently anticipates
- US consumer spending growth was weak in first-quarter data shows it has bounced back and is running at a solid pace
- US economy's long-term challenges include high and rising federal debt and relative stagnation of middle and lower incomes
- housing manufacturing look to have dipped again in 2Q
- economy performed reasonably well over 1H, jobs healthy
- many of June FOMC soft case for somewhat easier policy
- investment seems to have slowed notably on trade fears
- inflation pressures remain muted
- baseline outlook sees solid growth, strong labor market
The comments are more dovish and lay the pipe for that insurance 25 basis point cut in order to sustain economic growth. As such the US has weakened.
The stocks have turned positive on the day with the Dow up 43 points now and S&P up 5 points.
US yields were higher earlier. They have moved lower with the 2 year leading the way to the downside. The yield curve is steepening with the 30 year lower, from earlier levels, but still up 1.9 bps on the day.
