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Powell Asked Whether Recent Data Has Changed His View

FED
  • Q: Does recent data change your view of how much the employment rate would need to go up for inflation to come down to the levels you are looking for?
  • A: "It's a good thing the disinflation we have seen so far has not come at the expense of a weaker labor market, but I would also say the inflationary process you see under way is really at an early stage. What you see is really in the goods sector, inflation now coming down ... in the housing services sector, we expect inflation to continue moving up for a while, but then to come down assuming that new leases continue to be lower. So, in those two sectors you have a good story.
  • The issue is that we have a large sector called core non-housing services ... so far what we see is progress, but without weakening in labor market conditions."we are going to write down new forecasts at the March meeting and see at that time. I will say it is gratifying to see the disinflationary process now getting under way, and we continue to get strong labor market data, so, we will update those forecasts in March.

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