Fed's Powell says some ways away from substantial progress on jobs

(Updated - July 28, 2021 3:25 PM EDT)

(Updated - July 28, 2021 3:22 PM EDT)

(Updated - July 28, 2021 3:17 PM EDT)

(Updated - July 28, 2021 3:15 PM EDT)

(Updated - July 28, 2021 3:04 PM EDT)

(Updated - July 28, 2021 2:39 PM EDT)

• Fed's Powell Begins Press Conference
• Fed's Measures Ensure Policy to Support Economy
• Most Impacted Sectors from Virus Not Fully Recovered
• Housing Very Strong
• FOMC reviewed some considerations around asset-purchase program
• Q&A Begins
• Ground to cover on labor market
• We're some ways away from substantial progress on jobs
• "I'd say we have some ground to cover on the labor-market side. I think we're some way away from having had substantial further progress toward the maximum employment goal. I would want to see some strong job numbers, and that's kind of the idea."
• On delta variant, Powell says monitoring carefully, may weigh on return to labor market
• Ways away from considering raising interest rates, not on radar
• important feature of recovery is how uneven it is
• Powell concerned new strains of virus will keep coming
• Most inflation related to reopening economy, temporary
• In near term, risks to inflation probably to upside
• Inflation in medium term likely to move back down
• Low yields could be related to delta variant, technical factors, no single explanation
• Doesn't see anything that's questioning the Fed's framework when it comes to drop in yields
• Framework test will be when we think about raising rates
• Clearly on path to very strong labor market, shouldn't take that long to get there
• Ideally Fed wouldn't be buying assets and raising rates
• Labor market impacted by people finding new jobs, virus concerns, and generous unemployment benefits, caretakers
• Factors weighing on employment should wane
• With delta will have to watch, seems like effects will probably be less
• Doesn't seem like delta effects will be very large
• Transitory means process of inflation will stop, not taking prices back
• On timing of taper, Powell says there is range of views, no decisions made
• Won't predict what he will say in Jackson Hole remarks
• Inflation impacted by handful of things, mentions cars, hotels
• Waiting to see if prices "flatten out"
• Doesn't think it will take that long to know
• Members raised issue around MBS and tapering
• generally speaking, little support for tapering MBS earlier than treasuries
• some attraction for faster pace of MBS tapering
• Inflation driven by supply side
• best estimate that this is something that will pass
• on alert, will react in need too
• base case is inflation will go back down
• Not seeing wage inflation leading to price inflation
• Doesn't 't see 1970's style inflation upward spiral

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