Fed Chair Jerome Powell had an hour long exchange with Dallas Fed President Robert Kaplan. Powell reiterated his upbeat comments on the US economy. He said “I’m very happy about the state of the economy now”. He also hailed the Fed collectively and said “our policy is part of the reason why our economy is in such a good place right now.”
A key take away is his comments regarding the arrangement of having press conference after all eight FOMC meetings during the year, starting next. He said “certainly all meetings are live now, there’s no question about it now.” And he added, “over time, folks will get used to the idea that we can and will move at any meeting.”
On interest rates, Powell acknowledged the need to thing about “how much further to raise rates and the pace at which we will raise rates.” And, “the way we will be approaching that is to be looking really carefully at how the markets and the economy and business contacts will be reacting to our policy.” He emphasized that “our goals will be to extend the recovery … and to keep unemployment low and inflation low. So that’s how we’re going to think about it.”
On headwinds, Powell noted slowing growth abroad, waning effect of the administration’s tax cuts and spending increases are some that the economy might face. Also, he noted that there are a lot of factors weighing on home building too.
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