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Powell's Initial Comments Lean Slightly Dovish

FED

Powell says that the last inflation reading (ie May), and the one before it (ie April) "to a lesser extent", do suggest that "we are getting back on a disinflationary path"...we want to be more confident that inflation is headed sustainably to 2% before loosening policy. "What we would like to see is more data like we've been seeing recently".

  • On a 12-month basis, 2.6% PCE in May represents "really significant progress" on inflation. But "we have the ability to take our time and get it right".
  • Asked about a cut in September, Powell laughs, saying he's not going to give any specific dates, reminding that there are risks of going too soon or too late.
The initial read on Powell is very slightly dovish if only because asked, point blank, whether the Fed was eyeing a cut in September, he didn't dismiss it out of hand. And in discussing the data, he has emphasized significant progress in inflation. But you have to squint pretty hard to get an unambiguously dovish take here: it's doubtful that he is intentionally changing the messaging in any way from the June FOMC meeting.
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