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Powell: Meeting-By-Meeting, But Not "Unconditional"?


Powell's prepared Congressional testimony text is similar to last week's post-FOMC comments by Powell, which is of little surprise.

  • The main takeaway for current monetary policy is the reiteration that rates will be set "meeting by meeting": "We anticipate that ongoing rate increases will be appropriate; the pace of those changes will continue to depend on the incoming data and the evolving outlook for the economy. We will make our decisions meeting by meeting"
  • One interesting omission from the testimony vs the semi-annual Monetary Policy Report released on Friday is the word that rightfully garnered the most attention in the latter - the word "unconditional", as in “The committee’s commitment to restoring price stability -- which is necessary for sustaining a strong labor market -- is unconditional.”
  • Powell's prepared testimony reads softer than that: "We are strongly committed to bringing inflation back down, and we are moving expeditiously to do so."
  • The "Unconditional" terminology was seen as potentially presenting tensions between the Fed's price and full employment mandates - there will surely be some focus on Powell's view of recession risks today.

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