Powell: Process of getting inflation back to 2% “has a long way to go”

  • Nearly all FOMC participants expect it will be appropriate to raise rates somewhat further by year end
  • Seeing some effects of tightening but it will take time to see full effects
  • Labor market remains very tight but nominal wage growth showing signs of easing, job vacancies have declined
  • Longer-term inflation expectations appear to remain well anchored
  • Tighter credit likely to weight on economic activity but extent remains uncertain
  • We will continue to make our decisions meeting by meeting
  • Reducing inflation is likely to require a period of below-trend growth

The US dollar is a touch higher on these comments but there’s no big departure from what he said in the press conference.

The implied probability of a July 26 Fed hike is at 74% up from 69% yesterday.

This article was written by Adam Button at www.forexlive.com. Source