Powell Speech: Many on FOMC see stronger case for more policy accommodation

In his prepared remarks delivered at the Council on Foreign Relations in New York, Jerome Powell, Chair of the Board of Governors of the Federal Reserve System, noted that many members of the Federal Open Market Committee (FOMC) saw stronger case for more policy accommodation but added that they did not want to overreact to individual data points or short-term swings. 

Although the greenback is gathering strength during Powell's speech, remarks of St. Louis Fed President Bullard, who downplayed the idea of a 50 basis points rate cut in July during an interview with Bloomberg TV, seems to be providing the primary boost to the currency. Below are some key takeaways as reported by Reuters.

" U.S. Central Bank is independent, 'insulated from short-term political pressures'.

"Congress insulated Fed from political pressure 'because it had seen the damage' that can result."

"Fed's independence comes with an obligation to clearly explain policy."

"Unemployment is low, the economy is growing and inflation is near Fed's objective."

"Economy has 'performed reasonably well' so far this year."

"Solid fundamentals are supporting continued growth, strong job creation."

"Although inflation running somewhat below Fed's target, we have expected it to pick up."

"Since Fed's may policy meeting, cross-currents have reemerged with apparent progress on trade turning to greater uncertainty and incoming data raising concerns."

"Business and agriculture contacts reported heightened concerns over trade developments."

"Trade concerns may have contributed to drop in business confidence, investment."

"FOMC's baseline outlooks remain favorable against backdrop of heightened uncertainties."

"Tight labor markets are reaching lower-income communities, making it important to sustain U.S. economic expansion."

"Interest rates are lower than in the past and likely to remain so, falling close to zero when economy turns down."

"FOMC will devote time to assess policy review; to report conclusions likely during first half of next year."

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.