- Powell starts from a strong message on inflation
- inflation needs to be brought down to ensure lasting economic growth
- 50 or 75bp hikes most likely at following meetings
- further inflation surprises are possible
- economy strong, well positioned for tightening
The message is clear - no worries on growth side and clear focus on fighting inflation, at least for now. This increases odds of actually taking control of inflation at some point but also risks dragging economy into recession as (and in contrast to what Powell says) the economy already starts showing some cracks.
Sentiment reversed after the statement, the EURUSD currency pair erased early losses and is rising, US indices are also move sharply higher. Source: xStation5
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