Powell Sticks To Script, "Haven't Made Any Decisions" On Future Hikes

Chair Powell's event has concluded - totally overshadowed by the debt ceiling negotiations breaking down, but fair enough as he said little new. His appearance was in the form of a panel Q&A but his commentary was more speech-like, as he read almost all of his responses from a prepared text.

• Overall they were largely in line with the post-May FOMC meeting press conference. There was little hint of him conveying a more hawkish leaning message vs that meeting, following yesterday's surprising turn by Dallas' Logan. He nodded to stubborn services inflation but pointedly said at the end "we haven't made any decisions to which extent additional policy firming will be appropriate". Some notable quotes:
• On banks: "overall, banks and the banking system are strong and resilient...[tighter credit conditions] weigh on economic growth hiring and inflation. As a result, our policy rate may not need to rise as much as it would have otherwise to achieve our goals."
• On forward guidance: "Until recently, it's been relatively clear that further policy firming would be warranted, and our forward guidance has said so. Now, however, we've come a long way in policy tightening and the stance of policy is restrictive and we face uncertainty about the lagged effects of our tightening so far and about the extent of credit tightening from recent banking stresses."
  • "So today, our guidance is limited to identifying the factors we'll be monitoring as we assess the extent to which additional policy firming may be appropriate to return inflation to 2% over time. As I noted at the last press conference, that assessment will be an ongoing one, meeting by meeting. Having come this far, we can afford to look at the data and evolving outlook to make careful assessments."
• On services inflation: "I would say also, so far the data have continued to support the committee's view that bringing inflation down will take some time....I do think that labor market slack is likely to be an increasingly important factor in inflation going forward. In particular, inflation in non-housing services is showing signs of real persistence"
• On the balance of risks: "The risks of doing too much versus doing too little are becoming more balanced, and our policy has adjusted to reflect that fact."