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Powell speech: Policy in good place to wait and see

Federal Reserve (Fed) Chairman Jerome Powell said on Monday that there is tension between the Fed's two objectives, during a moderated discussion at the Harvard University Principles of Economics Class in Cambridge, per Reuters.

Key takeaways

"Makes sense in this time that there is not unanimity."

"Overall the research tends to find that buying long-term assets lowers rates and supports the economy."

"I'd be in the camp that there is something to that."

"We haven't really seen the downside risks to large balance sheet that many had predicted."

"We are committed to getting inflation back to 2% on sustained basis."

"Tariff inflation is a one-time price increase, adding a half to full pct point to inflation."

"Events in Middle East affects gas prices."

"Policy in a good place to wait to see how current situation plays out."

"Tendency is to look through supply shocks but must keep eye on inflation expectations."

"Inflation expectations appear anchored."

"We don't know what economic effects of current situation will be."

"Fed needs to be fully independent, but regulation is different especially since Dodd-Frank."

"The whole idea is to be nonpolitical."

"It's a time of very low job creation."

"Probably something longer-term happening outside the normal business cycle."

"Very optimistic about medium and longer term."

"AI is making people more productive."

"There's no denying it's a challenging time to enter the job market."

Author

Eren Sengezer

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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