Powell: FOMC is 'moving forward carefully' as risks around rates becoming more balanced

<ul><li>It's premature to say that mon pol is restrictive enough</li><li>Fed will raise rates if needed to lower inflation</li><li>Fed is making rate decisions meeting by meeting</li><li>Uncertainty over economic outlook is 'unusually elevated'</li><li>Fed funds range well into restrictive territory</li><li>Fed has made considerable progress in lowering inflation</li><li>Welcomes recent softening in inflation data</li><li>Need to see more progress on lowering inflation to 2%</li><li>Wage growth still high but moderating to more sustainable levels</li><li>Unemployment up but still historically low</li><li>As the demand- and supply-related effects of the pandemic continue to
unwind, uncertainty about the outlook for the economy is unusually
elevated</li><li><a href="https://www.federalreserve.gov/newsevents/speech/powell20231201a.htm" target="_blank" rel="nofollow">Full text</a></li></ul><p>Powell isn't saying that rate hikes are done, but he's close.</p><p>Key line:</p><blockquote>"It would be premature to conclude with confidence that we have achieved a
sufficiently restrictive stance, or to speculate on when policy might
ease. We are prepared to tighten policy further if it becomes
appropriate to do so."</blockquote><p>The dollar isn't doing much with this. The comments from Daly and Williams yesterday were a preview of what was coming here so this shouldn't be a surprise and the market is taking it in stride. There's a Q&amp;A coming up afterwards.</p><p>The market is pricing in 119 bps in cuts next year, which is the same as before he spoke. Where it really gets interesting now is March, where there's a 60% chance of a cut priced in — that's aggressive. </p>

This article was written by Adam Button at www.forexlive.com.