Powell Asked On Odds Of Recession and Policy Going Too Far

Q: Do the odds now favor a recession? Is 4.4% unemp an acceptable level of job loss? How will you know if you've gone too far?

• A: I don't know what the odds are. A very high likelihood of below-trend, much lower growth. It could give rise to increases in unemployment. But that's something that I think we need to have, softer labor market conditions as well. What we hear from people is that they really are suffering from inflation. If we want to have another very strong labor market, we have got to get inflation behind us. I wish there were a painless way to do that. There isn't.
• [Re going too far] It's hard to hypothetically deal with that question. Our SEP estimates will evolve over time.