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The Chairman of the US central bank, Jerome Powell, participates in a discussion at the Macroeconomics and Monetary Policy Conference, in San Francisco. Earlier on the same day the PCE data was released and came in line with consensus.
As for market’s reaction; the US dollar ticked higher as an immediate reaction to Powell’s remarks, although the action is being limited by the Easter Holiday, in terms of thin trading volume. The US Dollar gains modest upward traction with Powell’s hawkish words. Thinned market conditions due to the widespread Easter Holiday limit price action. The Dollar Index is trading at 104.530 at the time of writing.
Key Quotes:
My first thought on PCE was it came in line with expectations.
February reading is definitely more along lines of what we want to see.
Reducing rates too soon would be very disruptive.
Waiting too long could mean unneeded damage to economy and the labour market.
The economy is strong, no hurry to cut rates.
Make the right decisions is more important, we can handle whatever case.
We want to be more confident before we cut rates.
Latest core inflation numbers real progress.
We expect inflation to move to 2% on sometimes bumpy path.
If our base case doesn’t happen, we would hold rates where they are for longer.
We don’t know where rates are going to go back to when this whole thing is over.
The economy is not suffering from this level of rates.
Economy strong without question. Possibility of a recession is not elevated now.
If we see unexpected weakness in labor market, that could draw a policy response.
We won’t make decisions based on political calendars or anything like that.
