Fed Chair Powell Says Inflation Could Turn Out to be Higher and More Persistent Than We Expect

(Updated - June 16, 2021 3:30 PM EDT)

(Updated - June 16, 2021 3:12 PM EDT)

(Updated - June 16, 2021 2:43 PM EDT)

• Fed Chair Powell Begins FOMC News Conference
• Rapid Growth Reflects Bounce Back From Depressed Levels
• Business Investment Increasing at a Solid Pace
• Forecast Revised Up
• Recovery Incomplete, Risks Remain
• Pace of Improvement in Job Market Has Been Uneven
• Factors Weighing on Employment Growth Should Wane
• Inflation Has Increased Notably
• Seeing Upward Pressure on Prices From Spending Rebound, Bottlenecks
• Inflation Expected to Drop Back Down to Longer-Run Goal
• Inflation Could Turn Out to be Higher and More Persistent Than We Expect
• Will be Prepared to Adjust Policy
• Fed Expects to Maintain Accommodative Policy
• Projections Do Not Represent a Committee Decision
• Reaching Standard of Further Progress is Still A Way Off
• Fed to Support Economy for as Long as it Takes
• Will Provide Advance Notice Before Adjusting Bond Buying
• Begins Q&A
• On Path to Very Strong Labor Market
• In One or Two years, There Will be a Very Strong Labor Market
• Taking Time for Some to Find New Job That Fits
• Some Concern About Going Back to Public Facing Jobs
• Child Care Impacting
• Unemployment Insurance Ending Will Encourage Jobs
• Need to See More Data, Need to be a Little Bit Patient
• Inflation Has Come in Above Expectations But In Categories Linked to Recovery
• Thinks We Will be Seeing Some Reversals on Inflation, Not Sure Timing
• Will See Increasing In Supply Over Coming Months
• Over Time FOMC Sees Inflation Moving Down Meaningfully Toward Goal
• You Can Think of This Meeting as Talking About talking About Tapering
• Powell Wants to Retire "Talking About Talking About Tapering"
• Long-Term Price Expectations Consistent with Objective
• Inflation Expectations Are Well Anchored, In Good Place
• FOMC Will Make Judgement on Substantial Progress
• Dot Plot is Not Committee Forecast, Not Great Forecaster
• Discussing Liftoff Highly Premature
• Dot Plot Not Great Forecaster of Future Rate Moves
• Rate increase Are Not the Focus of the Committee
• Near Term is Path of Asset Purchases, Had Discussion Today
• Tapering Start Will Be Orderly, Methodical, Transparent
• Sees Value in Communicating Taper Thinking in Advance
• Doesn't Pinpoint Timing of Taper
• Still A Ways Away From Substantial Progress, But Making Progress
• Reverse-repo is Doing Its Job, Not Concerned with It
• No One Number, Indicator to Assess Employment
• Seeing Wage Increases, Don't see Troubling Wage Data
• Labor Market Supply and Demand Will Clear in Coming Months
• Demand for Goods is Very High, Incomes Are High
• High Inflation Readings We're Seeing Now Will Abate
• Doesn't Dismiss Chances of Higher Prices Going on For Longer Time, Doesn't Expect This
• Not Out of Woods on Covid-19, Premature to Declare Victory
• Near Term Inflation Associated with Reopening Economy, Longer Term About High Employment
• Projections May Reflect Inflation-Expectations Risk
• Fiscal Support Much Less Next Year
• Economy is Still Growing at a Very Healthy Rate
• Global Factors Weighing on Inflation Still Out There
• Higher Neutral Rate Would Give More Room to Cut Rates
• Nothing Wrong with Fed Framework
• Fed Not Facing Situation of Being Behind the Curve
• Question on Inflation Has Nothing to Do with Framework
• Economy is Recovering From a Deep, Unusual Hole
• Powell Ends News Conference

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