- Surveys of households and businesses show a sharp decline
- It remains to be seen how these developments will reflect consumers and investment
- Labor market is broadly in balance and consistent with maximum employment
- Inflation remains somewhat elevated
- Administration doing policy changes in: Trade, immigration, regulation cited
- Tariffs so far have been significantly larger than anticipated but policies are evolving
- If tariffs are sustained they’re likely to create inflation
- Tariff effects on inflation could be short-lived or could be more persistent
- Our goal is to ensure a one-time rise in prices is not persistent
- If goals in conflict, we would evaluate how far we were from each goal and how long it would take to bring them back to balance
- There is time to wait before adjusting policy
Powell didn’t give up much here but pricing for a June cut continues to fall. The market may be getting some solace from the confident tone from Powell on the economy.
This article was written by Adam Button at www.forexlive.com.