Powell: Tightening in financial conditions can have implications for policy

Jerome Powell, Chairman of the Federal Reserve (Fed), prepared remarks for delivery to the Economic Club of New York showed that Powell will say that significant tightening in financial conditions with higher bond yields can have implications for the policy. Powell will add that the policy setting committee is “proceeding carefully” and reiterate that they remain attentive.

The benchmark 10-year US Treasury bond yield retreated to the 4.9% area with the initial reaction and the US Dollar (USD) lost strength against its major rivals. At the time of press, the USD Index was down 0.42% on the day at 106.12.

Key Quotes

“More evidence of above-trend growth, or that labor market no longer easing, could warrant further monetary policy tightening.”

“Policy stance is restrictive.”

“Task of balancing too much tightening vs. too little is complicated by a rance of uncertainties.”

“There may still be meaningful tightening in the pipeline.”

“Committed to achieving sufficiently restrictive policy stance.”

“Attentive to data showing resilience of economic growth, demand for labor.”

“Lower summer inflation readings were very favorable, September data was somewhat less encouraging.”

“Inflation is still too high.”

“Labor market is tight but gradually cooling.”