🚨Trump: Not open to pulling back 145% tariffs. No to potential for pulling back tariffs on China [BTFD]
FOMC 5/7/25 - Rates left unchanged as expected
*FOMC: 'UNCERTAINTY ABOUT THE ECONOMIC OUTLOOK HAS INCREASED FURTHER'
*FOMC: 'UNCERTAINTY ABOUT THE ECONOMIC OUTLOOK HAS INCREASED FURTHER'
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Neil Dutta at Renaissance Macro: Labor market conditions have already cooled. What makes the Fed assume this stabilizes on its own? It can't and won't, which means a policy response will ultimately be required. Proceed accordingly.
Reporter Enda Curran: It’s clear the Fed is worried now about both rising inflation and rising unemployment, not a great space for a central bank to be in and setting us up for an interesting press conference. Powell will likely be pressed on which poses the greater risk. [unemployment]
Powell: Risks of higher unemployment, inflation have risen.
*Wage growth has continued to moderate.
*Indicators suggest labor market broadly in balance.
*Near-term inflation expectations have moved up.
*Longer-term inflation expectations consistent with goal.
*Tariffs so far significantly bigger than expected.
*Wage growth has continued to moderate.
*Indicators suggest labor market broadly in balance.
*Near-term inflation expectations have moved up.
*Longer-term inflation expectations consistent with goal.
*Tariffs so far significantly bigger than expected.
Powell: If large increases in tariffs as announced are sustained, will see higher inflation, lower employment.
*Avoiding persistent inflation will depend on size, timing of tariffs, and inflation expectations.
*We aim to keep inflation expectations anchored.
*Without price stability, cannot achieve strong labor conditions.
*If dual mandate goals in tension, consider distance from goal, time to close gaps.
*Can't say which way risks will shake out. Too early to know.
*If look through Q1 distortions, economy solid.
*Can let things evolve and become clearer.
*Underlying inflation picture is good.
*Inflation now running a bit above 2%, with decent readings in housing, non-housing services.
*Avoiding persistent inflation will depend on size, timing of tariffs, and inflation expectations.
*We aim to keep inflation expectations anchored.
*Without price stability, cannot achieve strong labor conditions.
*If dual mandate goals in tension, consider distance from goal, time to close gaps.
*Can't say which way risks will shake out. Too early to know.
*If look through Q1 distortions, economy solid.
*Can let things evolve and become clearer.
*Underlying inflation picture is good.
*Inflation now running a bit above 2%, with decent readings in housing, non-housing services.
Powell: When things develop, we can move quickly if appropriate.
*Everyone is just waiting to see how developments play out.
*Not a situation where we can be preemptive.
*Need to see more data
*We won't make progress on goals this year if tariffs stay.
*We look at totality of labor data to assess for weakening.
*We haven't faced question of two goals in tension in a long time, have to keep it in our thinking now. [dovish]
*There are cases in which rate cuts would be appropriate this year.
*There are cases in which rate cuts would not be appropriate.
*Trump calling for rate cuts doesn't affect our job at all.
*My gut tells me that uncertainty is extremely elevated.
*Everyone is just waiting to see how developments play out.
*Not a situation where we can be preemptive.
*Need to see more data
*We won't make progress on goals this year if tariffs stay.
*We look at totality of labor data to assess for weakening.
*We haven't faced question of two goals in tension in a long time, have to keep it in our thinking now. [dovish]
*There are cases in which rate cuts would be appropriate this year.
*There are cases in which rate cuts would not be appropriate.
*Trump calling for rate cuts doesn't affect our job at all.
*My gut tells me that uncertainty is extremely elevated.
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Powell: Right thing to do is await further clarity. [dovish patience]
*If nothing happens to alleviate those concerns, would expect that to show up in data in weeks, months.
*Watching extremely carefully, don't see much evidence in actual data of slowdown in economy.
*Uncertainty can show up in weaker economic data.
*If nothing happens to alleviate those concerns, would expect that to show up in data in weeks, months.
*Watching extremely carefully, don't see much evidence in actual data of slowdown in economy.
*Uncertainty can show up in weaker economic data.
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Powell: People are worried, but shock hasn't hit yet.
*People are worried, but shock hasn't hit yet.
*Can wait and move when it is clear. [Expectations have already dropped, layoffs follow. Unemployment data is only going to get worse]
*Depending on the way things play out, could have rate cuts, or holding where we are.
*Will have to see where things play out. [dovish patience]
*Data could break in a way that it favors one goal or the other.
*People are worried, but shock hasn't hit yet.
*Can wait and move when it is clear. [Expectations have already dropped, layoffs follow. Unemployment data is only going to get worse]
*Depending on the way things play out, could have rate cuts, or holding where we are.
*Will have to see where things play out. [dovish patience]
*Data could break in a way that it favors one goal or the other.
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POTUS Econ adviser Miran on if inflation is coming back: We don't believe that.
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