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Chair Powell On Recession Risks, What Could Cause Fed To Reverse Course

FED

Q: What do you say to those who say the Fed is taking a sledgehammer to the economy and risk recession vs 50bp / 50bp rate path? What would cause you to reverse course on rates?

  • A: Financial conditions have tightened, but Fed Funds is 1.6% and hard to see that's too high of a rate. Even if we get to the 2s by the end of summer, that's not a rate that will bring a recession on and then we will have a whole more data.
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Q: What do you say to those who say the Fed is taking a sledgehammer to the economy and risk recession vs 50bp / 50bp rate path? What would cause you to reverse course on rates?

  • A: Financial conditions have tightened, but Fed Funds is 1.6% and hard to see that's too high of a rate. Even if we get to the 2s by the end of summer, that's not a rate that will bring a recession on and then we will have a whole more data.