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FED: Chair Powell Begins FOMC Press Conference

FED
  • Powell begins the press conference with the usual review of current economic conditions, echoing the Statement's new language that the FOMC is attentive to risks to both sides of the dual mandate.
  • Economic activity has "continued to expand at a solid pace"; the pace of spending has slowed but remains "solid"
  • Supply and demand conditions have come into "better balance" in the labor market - back to around pre-pandemic conditions.
  • Nominal wage growth has eased.
  • Inflation has eased notably over the past two years but remains somewhat above the longer term 2% target.
  • As the labor market has cooled, inflation has declined.
  • Repeats forward guidance re "greater confidence", but notes that 2nd quarter inflation readings have added to the confidence. "We'll continue to make our decisions meeting by meeting."
  • Repeats risks to rates: if economy stays solid, rates will be held as needed; if inflation slows or labor market unexpectedly weakens, Fed is ready to respond.

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