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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 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.