Powell Sees Policy As "Tight" As He Puts June Pause On The Table (2/2)

Powell was unusually clear that he saw the current stance of monetary policy as tight, and it was noticeable that he spent far less time today talking about the dangers of sticky core services inflation ex-shelter as he did in the previous few meetings, and far more about the impact of tightening credit:

• "I think that policy is tight. You have 2% real rates. That's meaningfully above what many people would assess as neutral. You see that in interest sensitive activities, and more and more other activities. If you put the credit tightening on top and the QT that's ongoing, I think you feel like we may not be far off. Possibly even at that level."
• And for the FOMC as a whole: "There's a sense we're much closer to the end than the beginning, or maybe even there."
• Powell put a pause very clearly on the table for the next meeting: "A decision on a pause was not made today...We will be driven by incoming data meeting by meeting and we will approach that question at the June meeting."
• On cuts, he repeated what he's said before on the difference between the market and the median FOMC participant's view comes down to inflation, and if the FOMC's forecast "is broadly right, it would not be appropriate to cut rates".