Powell Q&A: We're going to be going meeting-by-meeting

<ul><li>Inter-meeting data was broadly in line with our expectations</li><li>CPI was a bit better than expectations</li><li>We haven't made any decisions about future meetings</li><li>We're looking for moderate growth, we're looking for a better balance in supply and demand, particularly in labor market</li><li>We get 2 more jobs and CPI reports before the Sept meeting</li><li>It is certainly possible that we would hike in Sept, also possible we would hold</li><li>June CPI is just one reading</li></ul><p>The US dollar sold off on these first Q&amp;A comments and the US dollar softened. The market may have been worried about particularly hawkish comments and saw these comments as not overly-hawkish.</p><ul><li>We will be looking at everything in deciding on what to do next, growth and inflation very closely but inflation in particular</li><li>How do you balance the risks of doing too much or too little? I would say "we're coming to a place" where there are challenges on both sides</li><li>We need to see inflation is durably down</li><li>We think core inflation is a better signal of where core inflation is going</li><li>We want to see core inflation coming down</li><li>There are reasons to see core coming down but it's still quite elevated</li><li>The historical record suggests softening in labor market conditions so that's still the likely outcome</li><li>The worst outcome for everyone would be to not deal with inflation and not get it done</li><li>Whatever the short term costs of getting inflation down, they outweigh the longer-term costs of not getting the job done</li><li>Monetary policy is restrictive, moreso today after today</li><li>Inflation has proved, repeatedly, stronger than we and other forecasters expected</li><li>We'll move rates when we move rates but it won't be this year, I don't think</li><li>Rate cuts next year will be about our certainty that inflation has come down</li><li>The economy is weathering banking turmoil well, still watching</li></ul><p>Powell appeared to make an effort to keep a September high on the table but it's priced at just 18%, which is the market saying that inflation won't be hot and jobs might cool.</p>

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