Key Inter-Meeting FedSpeak – Sept 2023 (1/3)

We've just published our review of FOMC communications in the July-September intermeeting period. PDF link is below.

• Powell Sounds "Careful": In the key communication of the post-July meeting period, Chair Powell’s Jackson Hole speech brought no real surprises but on the margins softened the outlook for further hikes (subtly noting that the Fed “could” rather than “will/would” need to tighten further). It was a cautiously optimistic speech on the inflation front but maintained the FOMC's tightening bias.
• Being "careful" was a key theme throughout his speech: Powell said "risk-management considerations are critical" and characterized the Fed's current position as "at upcoming meetings we are in a position to proceed carefully as we assess the incoming data and the evolving outlook and risks".
• In other words, not giving much away on future decisions on behalf of an FOMC that doesn’t seem that far apart on the degree of further tightening required.
• Most remain open to potential further tightening should conditions warrant, but are becoming increasingly half-hearted on more hikes with recent incoming data suggesting diminishing supply-demand imbalances in the labor market and waning inflationary pressures. With potential for policy lags to feed through the pipeline, most FOMC members seem willing to wait to see how conditions develop

Full PDF Here

KeyIntermeetingFedSpeakJul2023.pdf