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Chair Powell Asked Whether The Fed Has Dropped Its Easing Bias

FED
  • Q: You didn't mention the idea it might be appropriate to cut rates later this year, so has the Fed dropped its easing bias?
    • A: So, let me address cuts. Obviously, our decisions will depend on the incoming data. How the outlook is evolving. And the balance of risks. We'll look at the totality of the data. We think that policy is well positioned to address different paths that the economy might take. And we've said that we don't think it would be appropriate to dial back our restrictive policy stance until we've gained greater confidence that inflation is moving down sustainably to 2%.
    • If we had a path where inflation proves more persistent than expected. And where the labor market remains strong. But inflation is moving sideways. And we're not gaining greater confidence. That would be a case in which it could be appropriate to hold off on rate cuts.
    • I think there are other paths that the economy could take which would cause us to want to consider rate cuts. wo of those paths would be that we do gain greater confidence, as we said. If inflation is moving sustainably down to 2%. Another path could be an unexpected weakening in the labor market, for example.
    • I think it really will depend on the data. In terms of peak rate, I think really it's the same question. I think the data will have to answer that question for us.
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  • Q: You didn't mention the idea it might be appropriate to cut rates later this year, so has the Fed dropped its easing bias?
    • A: So, let me address cuts. Obviously, our decisions will depend on the incoming data. How the outlook is evolving. And the balance of risks. We'll look at the totality of the data. We think that policy is well positioned to address different paths that the economy might take. And we've said that we don't think it would be appropriate to dial back our restrictive policy stance until we've gained greater confidence that inflation is moving down sustainably to 2%.
    • If we had a path where inflation proves more persistent than expected. And where the labor market remains strong. But inflation is moving sideways. And we're not gaining greater confidence. That would be a case in which it could be appropriate to hold off on rate cuts.
    • I think there are other paths that the economy could take which would cause us to want to consider rate cuts. wo of those paths would be that we do gain greater confidence, as we said. If inflation is moving sustainably down to 2%. Another path could be an unexpected weakening in the labor market, for example.
    • I think it really will depend on the data. In terms of peak rate, I think really it's the same question. I think the data will have to answer that question for us.