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Powell Says Unclear How Long It Will Take To Cut Rates

FED
  • Q: How has the easing in financial conditions since November contributed to stronger growth?
    • A: It's hard to know that; I think we'll be able to look at this down the road and understand it better. You don't see an acceleration in growth; what you see is economic activity at a level that's roughly the same as last year. So what's causing inflation...I don't know there's an obvious connection there with easing financial conditions.
  • Q: Are you running out of time to cut rates 3x this year? With hindsight, are there any signs you can look back on now that suggested something more worrying than just expected bumpiness in Q1 inflation?
    • A: I'm not really thinking of it that way - I don't know how long it will take. When we get that confidence, rate cuts will be in scope, And I don't know exactly when that will be.
    • Re bumpiness: "Not really. I thought it was appropriate to reserve judgment until we had the full quarter's data. Until we saw the March data. What do we now see in the first quarter? Strong economic activity. We see a strong labor market. We see inflation. We see three inflation readings. I think you're at a point there where you should take some signal. We don't like to react to one or two months' data. But this is a full quarter. We are taking signal. And the signal we're taking is, it's likely to take longer for us to gain confidence that we're on a sustainable path to 2% inflation."
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