Powell opening statement: Further progress on inflation not assured, path uncertain

• Economy has made considerable progress toward dual goals
• In recent months inflation has shown a lack of progress and we remain highly attentive
• Inflation still too high, further progress not assured
• Private domestic final purchases were as strong as the second half of last year, that is an underlying signal for demand
• Supply and demand for labor has come into better balance
• Strong job creation has been met with increased supply but demand still exceeds supply
• Economic outlook is uncertain
• We do not expect it will be appropriate to cut until we gain greater confidence inflation moving towards 2%
• It is likely that gaining greater confidence will take longer
• We are prepared to hold rates longer
• We are also prepared to respond to an unexpected weakening in the labor market
• We will make decision meeting by meeting
• Slowing pace of balance sheet runoff will ensure a smooth transition
• Slowing pace does not mean balance sheet will shrink to less than it would otherwise

There’s nothing pointing to rate hikes here and that’s been enough to spark a relief rally in risk assets and a dip in the US dollar.

This article was written by Adam Button at www.forexlive.com.