Inflation
“Core services inflation has been grinding down; goods inflation is moving up a bit, expect more in summer.”
“Fed expects meaningful inflation in coming months; waiting to see the size of effects.”
“Will take confidence that inflation is coming down—without tariffs, that confidence would be building.”
“Best thing Fed can do is deliver price stability and full employment.”
Tariffs
“Starting to see tariff impacts; expects more in coming months.”
“Adapting in real-time to estimates of how high tariffs will be.”
“Cost of tariffs has to be paid, some will fall on consumers.”
“Tariffs contribute to higher near-term inflation forecast.”
Labour Market / Employment
“No evidence of increased slack except at the margin.”
“Labour market is not crying out for a rate cut.”
“US economy has defied many forecasts of weakening.”
Policy / Rate Outlook
“Rate path depends on data; no one holds rate paths with strong conviction.”
“At some point, rate cuts will be appropriate.”
“Waiting a couple of months may lead to smarter policy decisions.”
“Policy is modestly restrictive, not very restrictive.”
Powell made it clear that policy is currently "in a good place," and that further moves will be highly data-dependent. Divergent views on rate paths reflect different economic forecasts, not disagreement on principles. While no one has strong conviction on the precise path ahead, there is a shared view that rate cuts may eventually be appropriate—once inflation and labor market data support it. The Fed is purposefully patient and prefers to wait for clearer signals.
“Economy has been resilient—partly due to the Fed’s stance.”
“US economy continues to surprise forecasters.”
Sentiment / Uncertainty
“Uncertainty peaked in April and has come down since.”
“The time will come when we have more confidence; cannot say exactly when.”
Data Reliability
“Having reliable data is a huge public good, helps businesses and policymakers.”
Powell stressed the importance of high-quality economic data, calling it a public good that supports both Fed policy and business planning. While the Fed can function with current data, he warned against complacency, emphasizing the long-term value of maintaining America's global leadership in economic measurement.
Housing: “Housing situation is a longer-run problem.”
“Not saying Americans should expect pain in H2 2025.”
Powell briefly touched on long-run challenges in the housing market and distanced the Fed from ongoing political discussions, including President Trump’s evolving “bill.” He rejected the idea that Americans should expect hardship later this year, though acknowledged the economy still faces risks.
This article was written by Greg Michalowski at www.forexlive.com. Read More Details
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