Federal Reserve Chair Powell:
- With economy strong, we feel we can approach rate cut timing
question carefully - Confidence is
rising, but want more confidence before taking ‘very important step’
of starting rate cuts - Making good progress
on inflation - Could move sooner if
we saw labor market weakness or inflation ‘really persuasively’
coming down - More persistent
inflation could mean a later move - Repeats expectation
that March meeting likely too soon to have confidence to start rate
cuts - There is no ‘easy,
simple, obvious path’ - Expects inflation
will continue to move down in the first six months of this year due
to base effects - Also expects
12-month inflation readings to fall over course of this year - Asked about
policymaker forecasts in December for year-end rate policy level of
4.6%, says nothing since then leads me to think people would
dramatically change forecasts - Almost all 19
policymakers see it appropriate to cut rates this year - We do not take
politics into our decision making - In hindsight would
have been better to tighten policy earlier - Doesn’t see elevated
possibility of recession - Doesn’t see
commercial real estate loans as the makings of a crisis as seen in
the past - China problems
unlikely to affect US economy, may feel some impacts ‘a bit, but they
shouldn’t be large’ - Geopolitical risks
stand as largest near-term risks, but more for other parts of world
than the US
I don’t see much, if anything, new from Powell here. He is repeating what he has already said.
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The interview was recorded February 1 and has just gone to air
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S&P 500 futures on Globex update. With nothing much new does it open the door for a bid to emerge. Tha would be my bias from here but we’ll see.