August 29, 2022 16:25 GMT
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According to UBS economists "overall Chair Powell delivered a message that the central bank needs to remain resolute until the job is done, and at the moment, the job is far from done:
- Chairman Powell: "The Federal Open Market Committee's (FOMC) overarching focus right now is to bring inflation back down to our 2 percent goal. Price stability is the responsibility of the Federal Reserve and serves as the bedrock of our economy. Without price stability, the economy does not work for anyone. In particular, without price stability, we will not achieve a sustained period of strong labor market conditions that benefit all."
- That tone was in line with our expectations that the Chair would need to talk tough on inflation as it navigates a new course for policy. While the 50 bp versus 75 bp debate for the September meeting remains alive, at a coming meeting, likely soon, the FOMC is set to slow the pace of rate hikes.