Looks like Powell wants to be put on Santa’s nice list before the end of 2023. ✅
After the decision came out this afternoon that rates wouldn’t change, Powell’s big kicker to traders and investors was the very dovish tone.
Here’s a quick rundown of some of the bigger comments made by Powell and points made in the press release. Stars indicate the point/comment that is a biggun for traders/investors.
- Growth Dynamics: There has been a slowdown in economic activity growth from its vigorous pace in the third quarter.
- Financial Conditions: Tighter financial and credit conditions for households and businesses are anticipated to impact economic activity, hiring, and inflation.
- Policy Firming: The Fed’s language has shifted subtly, suggesting reconsidering the extent of any future policy tightening. 🌟
- 2024 Median Dot: Revised to 4.6% from 5.1%, indicating an easing of 50 basis points.
- GDP Growth: The 2023 projection is adjusted to 2.6%, with subsequent years slightly varying.
- Unemployment Rate: Expected to remain relatively stable through the forecast period.
- Inflation and Core Inflation: Both measures are forecasted to decline over the next few years, signaling an easing of inflationary pressures.
- Economic Path: Powell emphasized the uncertainty ahead, acknowledging the substantial slowing of economic activity.
- Inflation and Employment: Notable improvements in inflation and a narrowing gap between labor demand and supply were mentioned.
- Market Dynamics: Powell acknowledged the ongoing dialogue with market pricing and the importance of aligning market conditions with policy objectives. 🌟
- Rate Cut Discussion: Powell indicated that discussions on rate cuts are underway, reflecting a general expectation of this becoming a more prominent topic. 🌟