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Powell Says He Doesn't Think Policy Is Having Any Less Effect

FED
  • Q: How to interpret higher core PCE forecast for 2023? Shouldn't Fed funds median be higher?
    • A: One reason it went up because core PCE was higher this year. This is our best estimate as of today for how high we need to raise rates to bring inflation down. We'll make another estimate in the next SEP.
  • Q: Are you more pessimistic on inflation primarily because of wage growth?
    • A: We're going into next year with higher inflation than we thought; we're actually moving down next year. Remember the jumpoff point at the beginning of the year is higher. I don't think policy is having any less effect. Where is the drop coming from? From goods, clearly; by the middle of next year, from the housing services sector, and then the big question is how much you will see from the non-housing services sector.

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