FOMC Press Conference Introductory Statement, June 14, 2023

TL;DR

Chair Powell remains focused on the dual mandate of maximum employment and stable prices, committed to bringing inflation down to 2 percent.

Transcript

Transcript of Chair Powell's Press Conference June 14, 2023 CHAIR POWELL. Good afternoon. My colleagues and I remain squarely focused on our dual mandate to promote maximum employment and stable prices for the American people. We understand the hardship that high inflation is causing, and we remain strongly committed to bringing inflation back down... Read More

Key Insights

• ❓ The Federal Reserve is committed to its dual mandate of maximum employment and stable prices.
• 🍉 Chair Powell emphasizes the importance of price stability in achieving long-term maximum employment and stable prices.
• 🤘 The labor market remains tight, with some signs of improvement in supply and demand balance.
• ✋ Inflation pressures continue to run high, and the Federal Reserve aims to bring inflation down to 2 percent over time.
• 🧑‍🏭 The Federal Reserve considers various factors, including housing, wages, and systemic risks, in its decision-making process.

Questions & Answers

Q: What gives the Federal Reserve confidence in waiting to hike rates, despite elevated inflation?

Chair Powell explains that the decision to pause rate hikes and maintain the current level is a result of considering the speed and level of policy tightening. The focus now is on determining the extent of additional policy firming needed to return inflation to 2 percent over time.

Q: How are the lagging effects of monetary policy considered in the decision-making process?

Chair Powell acknowledges the uncertain lags with which monetary policy affects the economy and inflation. The Federal Reserve will monitor incoming data, economic and financial developments, and the cumulative tightening of monetary policy to determine the extent of additional rate increases needed to address inflation.

Q: How are housing and wages factors in the Fed's inflation outlook?

Chair Powell recognizes the importance of housing in the inflation outlook and expects rents and house prices to play a role in disinflation. However, the process of getting inflation down will take time, and wage increases need to be consistent with 2 percent inflation over time.

Q: Does the Federal Reserve assess systemic risks in the financial sector?

Chair Powell states that the Fed monitors systemic risks but notes that its jurisdiction primarily focuses on banks and bank holding companies. The nonbank financial sector is being addressed through efforts led by the Administration, with a focus on issues in the Treasury market and other areas.

Summary & Key Takeaways

• Chair Powell reiterates the Federal Reserve's commitment to price stability and its responsibility to bring inflation down to the 2 percent goal.

• The U.S. economy slowed last year but has continued to expand at a modest pace, with consumer spending picking up while the housing sector remains weak.

• The labor market remains tight, with signs of supply and demand coming into better balance, but inflation pressures continue to run high.