Powell Press Conference: Key Takeaways

The press conference of FED chairman Jerome Powell is nearing its end and its course was in line with market expectations.

Here are they key takeaways from the opening statement:

• There is still a long way to go until the labor market returns to pre-pandemic levels
• Household spending rising at an especially rapid pace
• Special factors appear to be weighing on labor force participation but those should wane in coming months
• Supply bottlenecks have been larger than anticipated
• Inflation still expected to fall back to longer run goals
• Housing remains strong and business investment rising at a solid pace
• Inflation could turn out to be higher and more persistent than we expect
• If we saw signs of material and consistent rises in medium-term inflation beyond target, we would respond
• The timing of any taper will depend on incoming data and we will provide advance notice before any changes

Below we present some key takeaways from the Q&A session:

• 'some ground to cover' before substantial further progress achieved
• It is clear inflation will be running at 2% for the months ahead
• Fed is clearly ways away' from raising interest rates; it's not on central banks radar now
• FED has 'some confidence' that medium term inflation will fall back
• Bond moves might be related to delta. Powell also cites technical factors and fall in expected inflation compensation
• US clearly on the path to a very strong labor market
• It's unusual to have such a high rate of vacancies to workers
• Fed chair suspects impacts of delta wave will be lower than expected
• Delta could slow the economy down for a period of months or not
• There's a range of views on what timing will be appropriate
• Today was the first deep dive on the timing
• I'm not meaning to suggest anything on the timing of taper; there's a range of views

US100 broke above major resistance at 15,000 pts. Should current sentiment prevail, upward move may accelerate towards all-time high at 15,132 pts. Source: xStation5