Hot Moments Fed Chair Powell made key remarks live on air.
Fed Chair Powell made key remarks on the state of the economy and Fed monetary policy during a meeting with Marketplace host #Kai Ryssdal.
Fed Chair Powell began his remarks by stating that the early Personal Consumption Expenditures (PCE) data was in line with expectations and encouraging. He also stated that the February data is in line with what the Fed would like to see.
Confidence in inflation requires better data than last year, Chairman Powell emphasized, noting that the Fed's approach is stable and forward-looking, and that the Fed's approach to inflation is consistent with what it has seen over the past year. He also explained that the Fed did not react to good data last year and will not react to a two-month high this year.
Fed Chair Powell warned that cutting rates too quickly would be disastrous and cutting rates too long would have an unnecessary negative impact on the economy and the labor market. Fed Chair Powell emphasized that the risks are two-sided, as the economy could manifest itself in unexpected ways.
The Fed Chairman reiterated that the economy is ready for unexpected consequences and should be cautious in making this decision. He also expressed confidence in the strength of the economy.
Fed Chair Powell stated that monetary policy is designed to respond to a range of factors. He stated that there was no need to rush to lower interest rates and that he could wait with more confidence before making that decision. Chairman Powell stated that the most important thing is to make the right decision. Powell added that policy is working despite the delays and is now prepared for any situation.
Chairman Powell stated that he would like to have more certainty before lowering rates. In addition, in his speech, Chairman Powell summarized the situation as follows.
The data took us by surprise.
We expect inflation to head toward 2%.
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