LIVE: Fed Chairman Jerome Powell Speaks!

FED Chairman, Jerome Powell, speaks again as part of the 'Perspectives on Monetary Policy' panel

Key points:

• Price stability is foundation of strong economy and currently is far above 2% FED's target
• Today, inflation is not as high as in the 1980s, many people experience it for the first time in their lives
• FOMC is strongly committed to returning to 2% goal
• How you think about the use of financial stability tools and liquidity tools opposed to more traditional monetary policy tools and how to they fit together?
  • Powell: "I want to start by saying that the overall banks and banking system are strong and resilient. And well-positioned to deal with the challenges they may face now or in the future"
  • [...] When banking stresses emerged in early March [...] the financial stability tools helped to calm conditions in the banking sector, development there is on the other hand are contributing to tighter credit conditions [...] as a result our policy rate may not need to rise as much as it would have otherwise to achieve our goals.
• Certainly possible that we will see continued supply shocks
• "The central banks will continue to be responsible for providing price stability and that will require us to navigate whatever additional supply shocks do occur"
• "I don't think labor market slack was a particularly important feature of inflation when it first spiked in spring of 2021. By contrast, I do think that labor market slack is likely to be an increasingly important factor in inflation going forward."
• US500 is falling during Jerome Powell speach by 0.1% to 4,209 points but likely caused by debt-ceiling paused
• "Now however we've come a long way in policy tightening and stance of policy is restrictive and we face uncertainty about the lagged effects of tightening so far and about the extent of credit tightening from recent banking stresses"
• FED's assessment will be an ongoing meeting by meeting having come this far FED can afford to look at the data and evolving outlook to make careful assessments
• Market interest rate path reflects a different forecasts than FED's one. Data supports view that inflation progress will be slow.
• FED have not made any decision about future policy tightening and until recently FED was expecting further tightening.
• Powell about inflation: "I think we're seeing much progress on goods and we have progress in the pipeline on housing services. But where we see persistent inflation now in the service sector."