Powell Expects Progress On Inflation In Second Half Of 2022

In his usual post-Fed meeting press conference, Fed Chair Jerome Powell said on Wednesday that he expects to see progress on inflation in the second half of 2022.

Main Quotes:

“It’s a very, very tight labor market.”

“We think there’s a pool of people who could come back to labor force, but may not happen quickly.”

“I do not expect supply chain issues to be completely worked out by end of year, but do expect progress.”

“I expect progress on inflation in the second half of this year.”

“We are not making progress, overall, on the supply chain issue.”

“We think we are positioned to make changes to our policy to deal with inflation.”

“We are positioned to make changes in policy to address the risk of higher inflation.”

“We have not made any decision on the size of rate increases.”

“That said, we are aware this is a very different expansion than the last one.”

“As we work our way through meeting by meeting, we are aware of differences from the last time we raised rates.”

“Those differences will be reflected in the policy we implement.”

“We are not trying to get inflation below 2%, want inflation expectations well anchored at 2%

“We get to that goal by getting inflation averaging 2% over time.”

“Growth this year is forecast to be well above potential.”

“The abor market is going to be strong for some time.”

“We want inflation back down to 2% in a way that leaves the labor market very strong.”

“We want to get inflation back down to 2% but also leave the labor market in a strong position.”

“Monetary policy will do its job.”

“I don’t think the Fed’s two goals are in tension.”

“A significant threat to the labor market is high inflation.”

“High inflation also taking away the benefits of large wage increases.”

“We monitor the slope of the yield curve, but we don’t control it.”

“We take the yield curve into account alongside other considerations.”

“The 2s to 10s gap is ‘well within range’ of normal yield curve slope.”

“This is going to be a year in which we move steadily away from highly accommodative policy.”

“That will involve ending asset purchases, lifting off and additional rate increases.”

“The last thing we will do is allow the balance sheet to run off.”

“We will have a couple more meetings about allowing the balance sheet to run off.”

“We will then do that as appropriate.”

“It’s impossible to say exactly how policy will go.”

“We will be nimble about this.”

“The economy is quite different this time from last tightening cycle.”

“All of these things will go into our thinking on policy.”

“Asset prices are somewhat elevated.”

“I don’t think asset prices themselves represent a significant threat to financial stability.”