Fed press conference live stream:
We have tool & confidence to bring inflation down.
and we've got to do it
labor market is extremely tight. inflation too high.
75bps raise.
Quantitative tightening will be significant
We have tool & confidence to bring inflation down.
and we've got to do it
labor market is extremely tight. inflation too high.
75bps raise.
Quantitative tightening will be significant
activity in housing mkt is softening
financial tightening is helping to bring demand down, gud
project GDP growth < 2 through 2024
job opening at historical high. wage growth strong
labor force participation rate too low
tightening should ease pressure on wages & prices
financial tightening is helping to bring demand down, gud
project GDP growth < 2 through 2024
job opening at historical high. wage growth strong
labor force participation rate too low
tightening should ease pressure on wages & prices
demand is strong while supply is constrained.
oil price huge problem
lockdown in China makes supply chain worse
we're acutely aware how bad inflation is
we STRONGLY commit to returning inflation to 2%
ONGOING increase in fed fund rate would be appropriate
oil price huge problem
lockdown in China makes supply chain worse
we're acutely aware how bad inflation is
we STRONGLY commit to returning inflation to 2%
ONGOING increase in fed fund rate would be appropriate
recent inflation surprised us
so we decided to raise rate more
Fed fund rate may come down in 2024, but still above historical range
75bps raise today is unusual. it's not common practice
next month we may raise 50 or 75. Depends on what inflation does
need to be flexible
so we decided to raise rate more
Fed fund rate may come down in 2024, but still above historical range
75bps raise today is unusual. it's not common practice
next month we may raise 50 or 75. Depends on what inflation does
need to be flexible
US economy is VERY strong. it can take tighter monetary policy
we thought to raise 50 bps earlier. but last week we got inflation expectation data. higher than expected.
so we quickly decided to raise more now, not later
so we quickly decided to raise more now, not later
July we could raise 50 or 75 bps, and then it'll give us more breathing room to decide what to do next
we think 3.5-4% is how high Fed fund rate needs to go to bring down inflation (right now it's 1% btw). but not sure
we need positive real rates across the yield curve
we think 3.5-4% is how high Fed fund rate needs to go to bring down inflation (right now it's 1% btw). but not sure
we need positive real rates across the yield curve
we do not take anchored inflation expectation for granted
inflation expectation has moved up. we need to take it seriously
our main task now is to get the rates up
we're going to be flexible in how we achieve that
inflation expectation has moved up. we need to take it seriously
our main task now is to get the rates up
we're going to be flexible in how we achieve that
forward guidance is useful tool
financial condition has tightened this yr mainly through expectation channel w/o us even raising rate much
we think our guidance is still credible
it's just this is unusual situation rn as we got data late
financial condition has tightened this yr mainly through expectation channel w/o us even raising rate much
we think our guidance is still credible
it's just this is unusual situation rn as we got data late
right now policy rate is well below neutral
soon enough policy rate will be up where it should be
do we slow down tightening then? eventually, but not until we see CONVINCING EVIDENCE that inflation is down
b/c last yr we saw inflation went down but then turned back up
soon enough policy rate will be up where it should be
do we slow down tightening then? eventually, but not until we see CONVINCING EVIDENCE that inflation is down
b/c last yr we saw inflation went down but then turned back up
so we need to be VERY SURE that inflation is coming down b/f we stop tightening
lowering inflation is getting more challenging w/ supply condition not helping
so our solution is to really bring demand down to match supply & bring wage pressure down
lowering inflation is getting more challenging w/ supply condition not helping
so our solution is to really bring demand down to match supply & bring wage pressure down
if we can bring inflation down w/ unemployment tick up a little, we'd see it as success since unemployment very low rn
we are NOT trying to induce a recession
we want to bring inflation down while keeping labor mkt strong
we think it's possible since economy is strong rn
but external conditions like war, supply chain make it hard. those are not in our control. monetary policy can't fix those
we want to bring inflation down while keeping labor mkt strong
we think it's possible since economy is strong rn
but external conditions like war, supply chain make it hard. those are not in our control. monetary policy can't fix those
yes we know financial condition has tightened but Fed fund rate still at 1%, by summer it probably hit 2%, still NOT a level that would induce a recession
we don't know how long the supply shocks will last, meanwhile we need to find price stability
on QT: we've communicated very clear to the mkt what we're gonna do, it's not a surprise to mkt. so we think it's understood & not gonna lead to major illiquidity
on QT: we've communicated very clear to the mkt what we're gonna do, it's not a surprise to mkt. so we think it's understood & not gonna lead to major illiquidity
for housing mkt: rates were very very low, now it's just coming back to normal. we're well aware mortgage rate has moved up a lot. how much it will affect housing prices we're not sure since there's low housing inventory so supply is tight
we're just watching it carefully now
ideally we bring the housing mkt down at reasonable level to make houses affordable
ideally we bring the housing mkt down at reasonable level to make houses affordable
Loading suggestions...