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Powell Says Fed Did Not Put a Recession Back Into The Forecast

  • Q: Did the Fed staff put a recession back into the forecast? How much do tighter fin conditions substitute for rate hikes?
    • A: I guess I don't want to answer your question about the recession, but the answer is no. You will know anyway in the minutes, the staff did not put a recession back in. It would be hard to see how you would do that if you look at the activity we have seen recently.
    • In terms of how to think of the translation into rate hikes, I think it is just too early to be doing that. The main reason is we don't know how persistent this will be. You can see how volatile it is. We can say financial conditions have clearly tightened and you can see that in the rates that consumers, households and businesses are paying now. And over time that will have an affect. We don't know how persistent it will be, and it would be difficult to translate that into a way I would be comfortable communicating how many rate hikes that is.

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