Powell Sees Inflation ‘Kind of Moving Sideways’

Thanks for joining us. Here are five key takeaways from Wednesday’s FOMC rate decision announcement and Federal Reserve Chair Jerome Powell’s press conference:

• Policymakers voted unanimously to keep their benchmark rate unchanged, at a target of 4.25% to 4.5%, while saying in their statement that “uncertainty about the economic outlook has increased further.” The risks of both higher unemployment and higher inflation have risen, they said.
• Powell repeated language he has used for months now, with regard to the potential to resume cutting rates: “We don’t think we need to be in a hurry.” He said that there are cases where it would be appropriate to cut, or to stand pat, and “I couldn’t confidently say that I know” which it’s going to be.
• Powell brushed off political pressure from President Donald Trump to cut rates, saying that “doesn’t affect doing our job at all.” He also said that he’s never asked for a meeting with any president, “and I never will.”
• The Fed chair echoed Trump administration officials in expecting that the first-quarter GDP figures – which showed a decline from the previous quarter – will be revised higher. Job creation is “fine,” wages are “in good shape,” and layoffs aren’t at high levels. As for inflation, that’s “moving sideways at a fairly low level,” he said -- even if above the Fed’s target.
• Treasuries hit their highs of the session after the Fed news, though moves were modest. Two-year yields were flat as of 3:31 p.m. in New York, at about 3.78%. The S&P 500 was down about 0.2%, while the Bloomberg Dollar Spot Index was up 0.5%.