What the Fed Chair said about various topics like employment, inflation, growth, policy

Below is a summary of the comments from the Fed Chair Powell according to topics

Employment and Labor Market:

  • There is a continuing strong pace of job growth.
  • Signs of labor supply and demand are coming into better balance.
  • Labor demand substantially exceeds supply.
  • Unemployment rate at the same level as lift off is seen as a real blessing.
  • Some softening in labor conditions is expected.
  • It’s been observed that the softening is not through higher unemployment, but through fewer job openings and resignations.


  • Inflation has moderated somewhat but remains well above the long-run goal of 2%.
  • The process of getting inflation back to 2% still has a long way to go.
  • June CPI data was welcome but is seen as only one month’s report. Looking for the signal from this to be replicated.
  • Headline inflation has come down sharply as energy and food prices have come down.
  • Housing inflation has started to work its way down.
  • It’s expected to see core inflation come down as it is still elevated.
  • The overall picture is of tighter and still tightening credit conditions.

Economic Growth:

  • Growth in consumer spending has slowed from earlier in the year.
  • The housing sector has picked up, though it is still below 2022 levels.
  • A growth at moderate or modest levels is preferred.
  • Stronger growth over time could add to inflation and may require a policy response.

Monetary Policy:

  • Decisions are made on a meeting-by-meeting basis.
  • The committee will take into account the cumulative effects of monetary policy and the lags along with economic and financial developments.
  • The intermeeting data came in broadly in line with expectations.
  • Monetary policy is believed to be restrictive and is putting downward pressure on economic growth and inflation.
  • The active tool of monetary policy is rates. The September decision could be another hike or remaining where we are, depending on the data.

Future Outlook:

  • Expecting to hold policy at restrictive levels for some time to deal with inflation.
  • If incoming data suggests more hikes are needed, the committee is prepared to act.
  • Policy is working about as expected with overall resilience of the economy.
  • It’s hoped that inflation will follow a lower path to be consistent with the CPI data.

Financial Stability:

  • There is a lot of uncertainty about outlook to next meeting let alone next year.
  • Things have stabilized in the banking system. Overall it remains strong and resilient but still being watched carefully.
  • The economy is seen to be weathering the banking turmoil quite well.
  • Banks are now working to see they are ready to use the discount window.


  • The Fed is not targeting wage inflation and won’t comment on union negotiations.
  • It is preferred to see wage growth at a rate consistent with 2% inflation over time.
  • Wages were not seen as an important cause of inflation early but are an important part of bringing inflation down now.

US stocks are mixed after his press conference:

  • Dow industrial average is up 12.59 points or 0.04% at 35451.55
  • S&P index is down minus 9.65 points or -0.21% at 4557.99
  • NASDAQ index is down -47 points or -0.34% at 14095.74

In the US debt market:

  • 2 year yield 4.845%, -4.8 basis points
  • 5 year yield 4.105% -6.9 basis points
  • 10 year yield 3.86% -5.3 basis points
  • 30 year yield 3.932% -2.0 basis points

In other markets:

  • crude oil is down $0.82 or -1.03% at $78.81
  • gold is up $8 or 0.41% at $1972.78
  • silver is up $0.19 or 0.79% at $24.88
  • bitcoin is trading modestly higher $29,338

This article was written by Greg Michalowski at www.forexlive.com. Source