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FED: Powell Notes FOMC Had "Conversation" About a Cut Today

FED
  • Q: Is the greater risk leaving rates high or cutting them?
    • A: For the last couple of years, the best service that we could do to the American people was to focus on inflation.  As inflation has come down, I think the upside risks to inflation have decreased as the labor market has cooled off.  I think the downside risks to the employment mandate are real now.  We have to weigh all of that.
    • And if you think about what that takes is we have a restrictive policy rate.  It is clearly restrictive.  It's been the rate that we've had in place for a full year. Other central banks around the world are facing the same question.  The time is coming at which you will begin to be appropriate to dial back that level of restriction.
    • Re Friday's nonfarm payrolls report: We'll all look carefully at the employment report.  So much other data coming in.  So much happening between now and the September meeting.  We'll make a judgment.
  • Powell notes that the FOMC had a "conversation" about a cut today:
    • The overall sense of the committee as I mentioned that we're getting closer to the point at which it will be appropriate to begin to dial back restriction.  We're not at the point yet.  We want to see more good data.  The decision was unanimous.  All 19 participants supported it.  There was a real discussion back and forth of what the case would be for moving it this meeting.  You know, a strong majority supported not moving at this meeting.  That was the strong sense of the committee.  It is a conversation that we had today.  Certainly.
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