Powell Q&A: We want to see a continuation of good inflation data to gain confidence

<ul><li>Six month data on inflation is good enough but we have to have confidence it will continue</li><li>We had very strong growth last year</li><li>A lot of the improvement in data has been from goods, eventually that will level out and we'll need to see more from services</li><li>We need to see more evidence that confirms what we think we're seeing</li><li>"We want to see more good data… not looking for better data… more good data…"</li><li>Almost every participant on the committee does believe it will be appropriate to lower rates</li><li>An unexpected drop in unemployment would 'absolutely' argue for cutting sooner</li><li>There was no proposal to cut rates today. There's a wide disparity about when to cut</li><li>The jobs market is rebalancing, it will probably take a couple years for for wages to normalize</li><li>We're not looking for inflation to anchor below 2%</li><li>We want to finish the job on inflation while keeping the labor market strong</li><li>Overall it's a pretty good picture on the economy</li><li>I don't think it's likely we will have enough confidence to cut in March, I don't think that's the base case</li><li>We won't keep it a secret when we have confidence on inflation</li><li>I really like anecdotal data, and in chats with business there are signs of re-acceleration</li><li>I'm not so worried that growth is too strong and inflation could come back</li><li>Continued declines in inflation are what we're looking at</li></ul><p>The US dollar initially reversed back near the lows of the day as Powell spoke but then jumped when he pushed back on March.</p><p>The message here is that nothing needs to 'crack' to cut rates… just more of the same is enough. Moreover, a soft Jan or Feb jobs report and they're sharpening the axe.</p>

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