Powell answers questions on December 19, 2018:
- Inflation a bit below target gives the Fed room to be patient
- We still have a positive forecast on growth with GDP above potential
- Going forward, we will be looking for data to confirm that forecast
- We've reached the bottom end of the range of neutral
- We're going to be looking to the data
- We took note of tightening of financial conditions and we're going to be watching carefully
- More broadly there is a sense of concern about global growth and that may be partly about trade tensions
- Political considerations have played no role in our decisions, nothing will deter us from doing what we think is the right thing to do
- Inflation has continued to surprise to the downside
- Policy doesn't need to be accommodative, can be neutral
- The amount of balance sheet runoff so far has been small
- I don't believe policy is restrictive
- Inflation is no longer reactive to changes in growth
Powell is starting to take a more-dovish tone.
A great question started with "you're about to undershoot your inflation target for the seventh straight year and your forecasts are to undershoot it again next year."
That was followed up with a question asking why they're hiking if inflation is below target and there's no chance of an overshoot, because it begs the question of if the 2% target really is symmetrical.
