Powell: Decisions to be made on a meeting-by-meeting basis

Fed Chairman Jerome Powell noted that the US economy has performed remarkably well in recent years while giving a nod of the head to recent inflation readings. The head of the Fed also reaffirmed that the Fed won’t be waiting until inflation reaches the 2% annual target.

Key Quotes

Economy performed remarkably well last couple of years.

This year expected economy to slow and inflation to continue to make progress; something like that is happening.

Labor market no tighter than before the pandemic.

Second quarter of inflation does represent progress with three better readings.

The three readings in second quarter to add to confidence in inflation falling.

Now that inflation has come down will look at both mandates.

If we were to see unexpected weakening in labor market, that would merit reaction from us.

Not going to send any signal on any particular meeting.

Will make decisions meeting by meeting.

Will make decisions based on evolving data and outlook.

The Fed’s undertaking is to make decisions on data, and only on data, not politics.

If the Fed waits for inflation to get to 2% to cut it has waited too long.

The test is that officials want to be confident it is moving down; more good data will add to confidence, and lately the Fed has been getting that.