Powell comments to reporters:
He emphasized ‘material’ 3-4 times.
- Risks to the outlook have shifted more positively
- Says he was generally referring to less uncertainty on trade
- Consumer facing companies say consumers doing well
- Economy has been resilient to winds blowing this year
- Today’s business investment in GDP was weak
- We generally hike because we see inflation moving up, we don’t see that now
- Inflation expectations are quite central to its framework
- If we were to have a sustained reduction in trade tensions, it would bode well but I wouldn’t expect immediate effects; it would take time
- Significant inflation rise needed before any rate hike
- There is a big and growing difference in rural and urban outcomes
- GM strikes likely too ‘a couple tenths’ off growth this quarter but is likely to return
- Policy is ‘somewhat accommodative’ in my estimation
- Not seeing asset bubbles, monitoring
- We think liquidity in the financial system is ample but we’re working to make it move more-freely
The dollar initially rallied but everything reversed when Powell said that it would take a significant rise in inflation before they start hiking again. That was a strong message they’ll be on the sidelines.