- Consumer spending has been resilient
- Government shutdown effects should be reversed this quarter
- Activity in housing sector weak
- A good part of slowing in jobs market represents declining workforce, though hiring demand has clearly slowed as well
- Inflation has eased significantly but remains somewhat elevated
- Inflation should trend towards 2% once tariff inflation has passed through
- Mon pol is not on a preset course
- We will continue to do our jobs with objectivity and integrity
In the Q&A:
- Cook case is perhaps the most-important in Fed history
- The outlook for economic activity has clearly improved since the last meeting
- Inflation performed about as expected
- Will make decisions meeting-by-meeting
- If you look at the December SEP, most people had additional rate cuts
- We think we’re well-positioned to let the data speak to us
- There was broad support for holding rates, including among non-voters
- A lot of tariff inflation has moved through the economy already
- Most of the overrun in goods inflation was from tariffs
- Upside risks to inflation and downside risks to employment have diminished
- Survey and market-based inflation numbers have come way down, that’s very comforting
- A rate hike isn’t anyone’s base case
- The consumer is filling out surveys that are really bad, and then spending
- Consumer spending is uneven across income levels but overall it’s good
- Economy has surprised us with its strength
- I don’t take much of a message from the price in gold
Powell has been less dovish without a doubt but the Fed funds futures market hasn’t moved much. Some of that might reflect that there will be a new Chairman for the June meeting. For that meeting, there are 19 bps of easing priced in. Through year-end, about 46 bps in easing is priced in, which is little changed from pre-meeting.
This article was written by Adam Button at investinglive.com.
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