Comments from Powell in the prepared remarks of his Senate Humphrey Hawkins testimony:
- Reaffirms patient approach to monetary policy changes
- Economy is healthy and outlook favorable, Fed has seen in the past few moths some 'crosscurrents and conflicting signals'
- Recent economic data has 'softened' but 2019 expected to be 'solid' but slower than 2018
- Some signs of stronger wage growth
- Expects inflation to run near its 2% target after the transitory effects of the energy price decline
- Balance sheet size to be driven by reserves and currency demand
- Taking 'patient' stance on policy changes
- GDP growth in 2018 was "a little less" than 3%
- Full text
The only thing that stands out to me is a bit of optimism on the domestic side. That's mildly bullish for the US dollar but I'm having a hard time seeing how this appearance is going to be any kind of a market mover.
Quotable:
While we view current economic conditions as healthy and the economic outlook as favorable, over the past few months we have seen some crosscurrents and conflicting signals. Financial markets became more volatile toward year-end, and financial conditions are now less supportive of growth than they were earlier last year. Growth has slowed in some major foreign economies, particularly China and Europe. And uncertainty is elevated around several unresolved government policy issues, including Brexit and ongoing trade negotiations. We will carefully monitor these issues as they evolve.
