Powell Q&A: It seemed to make obvious sense to use to moderate pace of hikes

Powell explained that it seemed like a 'natural' evolution of policy to switch to a slower pace of hiking as they reach the final destination. However we didn't talk about doing an 'every other meeting' approach.

• We didn't make a decision about July
• I do expect July will be a live meeting
• Data came in 'consistent with, but on the high side' of expectations
• Any forecast about inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term coming down this year will contain a big dose of housing disinflation
• Housing services disinflation will be a little slower than we would have expected
• We have seen some loosening of labor market conditions
• The conditions we need to see in place to get inflation down are coming into place, including lower growth and labor slack
• It's common sense to go a bit slower as we near the destination
• We don't know the full extent of the banking turmoil
• I can't tell you that we ever have a lot of confidence that we can see where the Fed funds rate will be far in advance
• Inflation risks are still to the upside
• We're not seeing a lot of progress on core PCE
• We want to see core PCE moving down decisively
• Says Fed watching housing carefully
• There is a path to getting inflation back to 2% without a sharp rise in employment

Powell lightly pushed back on the idea that July was a done deal by saying it was a live meeting. Some are seeing that as dovish and a sign of an ongoing pause but I think he took it as far as possible without pre-committing.

He didn't offer much in this press conference but the market sensed at least an open-mindedness to not hiking in July and beyond. Fed funds futures implied pricing shows only a 60% chance of a July hike.