Powell's Case For Pause Was Muddled (2/2)

Some further thoughts:

• The dot plot showed somebody on the FOMC who sees 100bp of further hikes this year, ie every meeting. It would have been interesting to see Powell pressed a little more on how the decision to hold today was part of the "moderation" of the pace.
• One strange thing was Powell saying that the new Dot Plot median for 2023 just reflects where market pricing was prior to March, so it's no big deal. ("So although the 5.6% is pretty consistent if you think about it, where the Fed funds rate was trading before the bank incidents of March, so we've kind of gone back to that.").
• And if 5.6% is appropriate, why was there so little hint of that kind of consensus leading up to the meeting? The post-May meeting data may have justified a hike in June and a planned hold in July, but holding today suggests the data hasn't been nearly as decisive at that.
• Powell sounded more downbeat on inflation than in the months prior when it was really surprising to the upside, but the data seems if anything to be moving in their direction.
• Perhaps that's a function of time passing with little decisive progress, but it's a far cry from the more optimistic tone earlier in the year (when arguably even less progress was evident). Again, this is probably what was required to get the hawks on board with a pause today - the data will determine whether we get 2 more hikes this year as the new dot plot suggests.