Powell Q&A: Strong view of FOMC is need to stay with rates high until inflation falls

• Expectation is that services inflation will not move down quickly so we'll have to raise rates higher
• Non-housing related services inflation will take a substantial period to get down
• 4.7% unemployment would still be a strong labor market
• Appropriate thing to do is slow pace of hikes, will allow us to 'feel our way' but won't say whether 50 bps or 25 bps
• Need to see non-housing services sector "get into better balance"
• “It’s now not so important how fast we go ... It’s far more important to think what is the ultimate level, and then at a certain point the question will become how long will we remain restrictive.”
• Frames decline in CPI as something they've been expecting, says it gives them greater confidence in forecasts
• Changing our inflation goal is something we're not going to think about
• There are about 3.5m fewer people working in the US than demographics would have suggested a few years ago
• About 500,000 people died of covid, who would be working now

Key line:

"I wouldn’t see us considering rate cuts unless there’s confidence that 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 is moving down to 2%."