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Chair Powell Asked If The First Cut is Highly Consequential

FED
  • Q: Is the first cut highly consequential?
    • A: The risks are really two sided here. We're in a situation where if we ease too much or too soon we could see inflation come back, and if we ease too late we could do unnecessary damage to employment. It is consequential - we want to be careful - fortunately with strong growth and employment, we can let the data speak on that.
    • I'm always careful about dismissing data we don't like. The January CPI/PCE numbers were quite high, reason to believe there could be seasonal effects there. February was higher than expectations, but we have it currently well below 30bps core PCE, which is not terribly high. Hasn't changed the overall story which is inflation moving down gradually on a sometimes bumpy road toward 2%. I don't think those readings added to anyone's confidence that we're moving to that point.

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