Q&A from Powell on Nov 3, 2021:
- We should see bottlenecks ease in 2022
- We think we can be patient
- We don't think it's time to raise interest rates
- It's possible to meet maximum employment threshold next year, "it's certainly within the realm of possibility"
- We don't have evidence of a wage-price spiral, we'll be watching carefully
- We don't expect troubling increases in wages to emerge
- Inflation is due to bottlenecks and very strong demand
- Our policy is putting us in a position to address a range of plausible outcomes
- Says he won't offer much more detail regarding bar for changing pace QE
- Says 'we wouldn't want to surprise markets' with a shift in taper strategy
- Transition to services spending from goods spending could soften inflation
- We start to see some bottlenecks abating but they are worsening overall
- Inflation has been higher than we anticipated. Cites global supply chains, says it's very difficult to forecast
- I don't think we're behind the curve
- No comment on re-nomination process
- Inflation is being driven by goods now; whereas it was for services for 25 years
- 500-600k jobs per month would be good progress
There's no hint of panic from Powell on inflation any effort to put a hike on the table. The caveats are there but 'we're prepared to be patient' says it all. The Fed is certainly shaken in its belief on low inflation but it's certainly not broken.
In turn, the US dollar is beginning to roll over and naturally the stock market likes it.
