CANADA TO PUBLISH FISCAL UPDATE ON DEC. 16

MNI BRIEF: Inflation Expectations Tick Higher - NY Fed

MNI BRIEF: China Passenger Car Sales Up In November Y/Y

MNI BRIEF: Mexico Inflation Down To 4.55% In November

MNI China Daily Summary: Monday, December 9

MNI BRIEF: China To Strengthen Policy Easing In 2025: Poliburo

MNI:US OCT WHOLESALE INV 0.2%; SALES -0.1%

EZ/UK Bond Supply Calendar: Austria, UK Auction on Tuesday

MNI BRIEF: China Nov CPI Slows To 5-Month Low Of 0.2% Y/Y

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

Chair Powell Shows Some Optimism Over Soft Landing

FED
  • Powell resurrects the term "transitory", and shows some optimism over a soft landing... Q: Have you considered whether based on the incoming data vs your SEP forecasts whether your understanding of the inflation dynamic may be wrong and it's possible to achieve fighting inflation without raising rates so high and surging unemployment?
  • A: You're right, if you take short-term measures of core PCE inflation, they're quite low right now but that's because of significantly negative goods inflation. Most forecasters would think that would be transitory. And goods inflation will move up fairly soon, back up to its longer term trend. So a lot of forecasters would call for core PCE to go back up ot 4% by the middle of the year for example. That would suggest there is work left to do.
  • Let's say inflation does come down much faster than we expect. Obviously we would take that into account. In terms of core non-housing services... they are sensitive to economic slack / labor market in a way, but other sectors are not (eg financial services).
  • In my own view you will not have a sustainable return to 2% inflation without a better balance in the labor market, and I don't know what that will require in terms of increased unemployment. I still think and continue to think there is a path to getting inflation back down to 2% without a really significant economic decline or significant increase in unemployment. I think there is ongoing disinflation, and we don't yet see weakening in the labor market, so we will have to see.
Energy BulletsCommodities
Energy BulletsCommodities

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.