Fed Chair Jerome Powell testimony to Congress 27 February 2018

  • Gradual Reduction Of Monpol Will Sustain Strong Labor Market While Fostering A Return Of Inflation To 2 Percent
  • Median FOMC “Dot Plot” Sees Year-End Federal Funds Rate Rising Gradually Over The 2018-2020 Period. Median Projection For End Of 2018, 2.13%
  • Upbeat Growth Will Likely Continue To Boost Business Investment, Economic Outlook Remains Strong
  • Moderate Wage Gains Likely Reflect The Offsetting Influences Of A Tightening Labor Market And Persistently Weak Productivity Growth
  • Medium Term Inflation On A 12-Month Basis To Move Higher And Stabilize Around FOMC´S 2 Pct Target Over
  • FOMC Views Some Of The Inflation Shortfall Over Last Year As Reflecting Transitory Influences
  • Month-On-Month Prices Data A Little Higher Toward The End Of The Year Than In Earlier Months.
  • Econ Activity Abroad Has Been Solid In Recent Quarters And Associated Strengthening Of Demand For U.S. Exports
  • Inflation Remains Below The 2% Longer-Run Objective
  • Anticipate That Inflation On A 12-Month Basis Will Move Up This Year And Stabilize Around The FOMC’s 2 Percent Objective Over The Medium Term.
  • Continue To View Some Of The Shortfall In Inflation Last Year As Likely Reflecting Transitory Influences That We Do Not Expect Will Repeat
  • Continue To Monitor Inflation Developments Closely
  • Fiscal Policy Is Becoming More Stimulative
  • Wages Should Increase At A Faster Pace As Well

Not much we hadn’t already heard from the Fed at the last FOMC. The dollar ticked around 20/25 pips higher in a few pairs but nothing shocking. If anything, the softer durables should start to weigh on the buck after the algos have finished with Powell.

Ryan Littlestone
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