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FOMC Press Conference (1/2): Powell Won't Be Drawn On Cut Timing

FED
Fed Chair Powell gave away even less than usual in today's press conference, but here are a few observations:
  • As expected, Powell provided guarded optimism that the FOMC would receive further good news on inflation like today's CPI report, but at this stage more is required to meet the "test" for cutting rates (the other "test" is an "unexpected deterioration in labor market conditions"). He said "we do see today's report as progress and as, you know, building confidence, but we don't see ourselves as having the confidence that would warrant, you know, that would warrant beginning to loosen policy at this time."
  • Later when asked whether 2 more "good" months like May's would be enough to instill enough confidence to cut, he wouldn't endorse that idea, saying it was "going to be the totality of the data" that decided.
  • Regarding submissions for the Summary of Economic Projections, he confirmed that participants had the ability to change their projections after the CPI release, but said that while some did, most didn't.
  • Re the split between 1 or 2 cuts for 2024 in the Dot Plot, as usual he reminded that this wasn't a Committee forecast, and noted "these are very close calls... fifteen (FOMC participants) of the nineteen are clustered around one or two, so I think I would look at all, I look at all of them as plausible, so I think that does tell you what the committee thinks. But what everyone agrees on is it's going to be data dependent."
  • Either way, re a September cut, "we don't make decisions about future meetings until we get there".
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