Powell opening statement: Recent indications point to a moderation in consumer spending

Forex Short News
  • Unemployment rate in a narrow range for the last year
  • Labor market conditions broadly in balance
  • Labor market not a source of inflationary pressures
  • Surveys show heightened uncertainty, unclear how uncertainty will affect outlook
  • Surveys mention tariffs as a driving factor
  • New administration is embarking on policy changes, but uncertainty around the changes is high
  • Net affect of policy changes is what matters
  • We do not need to be in a hurry, we will await further clarity

The line that “We do not need to be in a hurry” has become a policy signal now as he repeats it. At some point he will stop saying that and the market will interpret it as an imminent move.

  • Uncertainty today is unusually elevated
  • Have seen some signs of increased tightness in money markets
  • If economy remains strong, we can maintain policy restraint for longer

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