JPMorgan were perhaps a little unking to Federal Reserve Chair Powell after this comments on Thursday, saying the remarks were those of a two-handed economist. Paraphrasing:
- there is progress on inflation BUT there is still a “long way to go,”
- while labor markets are tight BUT they are moving towards “better balance”
- economic growth is strong BUT expected to moderate
Yes they are two-handed, like an economist, but none of the above is wide of the mark.
From a note to clients:
- "The forward-looking implication is that the so-far immaculate disinflation may get a little more painful in the future"
- "We still believe the Fed is done hiking for this cycle, but today’s speech should serve as notice that their rhetoric must stay hawkish until they’ve seen further improvement in inflation."
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JPM continues to expect the rate hike cycle is over. I'd be wary of locking that view down for certain given the view of the big guy in charge:
- Powell: We are not confident that we've achieved sufficiently restrictive policy
- Caution: US dollar jumps as the market re-thinks more-dovish Fed path
- Powell Q&A: US economy has been stronger than expected this year
