Powell speech: Certainly possible Fed will need to move policy to restrictive levels

Jerome Powell, Chairman of the Federal Reserve System, is delivering his remarks on the monetary policy outlook at a press conference following the FOMC's decision to hike the policy rate by 50 basis points in May.

Key quotes

"Certainly possible Fed will need to move policy to restrictive levels."

"If we need to do that, will not hesitate."

"We are absolutely prepared to do that."

"Fed does see restoring price stability as absolutely essential."

Price stability is particularly essential for labor market."

"We've been hit by historically large inflationary shocks since the pandemic."

"We have to look through that and find price stability out of this."

"It's going to be very challenging to achieve price stability."

"If we think it's appropriate, we will take rates into restrictive levels."

"The decision to do that will be on the table when we reach neutral."

"I expect we will get to neutral expeditiously."

"Effect of shrinking balance sheet is uncertain."

"People estimate that broadly on the path we are on balance sheet reduction will deliver an equivalent of 1/4 pct point rate increase over the course of a year."

"Important they know we know how painful high inflation is."

"Monetary policy is working through expectations."

"Markets think our forward guidance is credible."

About Jerome Powell (via Federalreserve.gov)

"Jerome H. Powell took office as Chairman of the Board of Governors of the Federal Reserve System on February 5, 2018, for a four-year term*. Mr. Powell also serves as Chairman of the Federal Open Market Committee, the System's principal monetary policymaking body. Mr. Powell has served as a member of the Board of Governors since taking office on May 25, 2012, to fill an unexpired term. He was reappointed to the Board and sworn in on June 16, 2014, for a term ending January 31, 2028."

"*Note: On February 4, 2022, the Federal Reserve Board named Jerome H. Powell as Chair Pro Tempore, pending Senate confirmation to a second term as Chair of the Board of Governors."