- Sees core PCE at 3.2% for March
- Sees PCE at 3.5%
- Near term inflation expectations have risen
- Jobs growth slowing reflects slower labor force growth
- Consumer spending is resilient
- Inflation elevated, in part reflecting energy price increase
- Every new Fed chair takes a look at communication
- I don’t know if the easing bias will be in the statement at the next meeting
- The language was a closer call than in March
- What happens in the next 30-60 days could change things
- Had a vigorous debate about guidance today
- Majority of committee did not want to change the language today
- People are not saying we should hike now
- People argue going to neutral would reflect markets
- A group of people don’t think we need to be in a hurry to change the language in case we need to reverse it
- No one was voting for a hike
- I would never be a shadow chair
- I respect the role of the Chair
- I was a Governor for six years
- The labor market shows more signs of stabilizing while inflation is ‘kind of misbehaving’
- I was never the biggest fan of the dot plot
- “You can’t beat something with nothing.”
- We are the only major central bank that doesn’t publish a forecast
In his defense, Powell kept a very low profile as Governor the first time. He rarely weighed in publicly and never made waves, that’s why he was a surprising pick for Fed Chair at the time.
Quotable:
“A group of us, including me, didn’t feel like we needed to be in a hurry on [removing the easing bias]. Markets are not confused about our reaction function. The other side of the argument [to remove easing bias] is good too as I mentioned. It’s perfectly good argument”
Warsh has talked about getting rid of the dot plot but Powell indicated that he tried that and there wasn’t broad support for it. He said that Warsh looking at communications “is the most-natural thing in the world”.
Another quotable:
“If this goes on for much longer and prices go much higher then we’ll feel that much more. I’m talking about aggregate inflation numbers. We know, we’re very well aware that people are experiencing higher gas prices all over the country now. And that hurts”
This article was written by Adam Button at investinglive.com.
