Powell Q&A: We’re not thinking about political parties when we make decisions

• The Fed does have obligations to explain itself to public and congress
• Inflation is a social phenomenon, if they believe it will go up, it probably will
• We will be careful about changing policy until we have a lot more certainty
• We have time to make assessments on net effects of policy changes before we react
• When it comes to fiscal policy, it takes a long time for a bill to get through

There is nothing new in the Q&A so far and the interviewer is asking non-stop political questions. Powell basically had to straighten her out after the 10th political question and the crowd cheered him on.

• Increase of new business and people moving jobs have been factors in productivity growth
• You can argue generative AI will cause a huge boost of productivity, and others who don’t say it will
• The history of technology is that it takes longer to show up in productivity but it’s bigger

Finally onto rates:

• Policy is restrictive
• Can’t say how restrictive it is though
• We’ve started process of cutting rates, moving to neutral
• Need to move patiently, carefully to neutral
• As we near plausible range of neutral, we may need to slow pace of what we are doing
• If the data let us, that seems like a smart thing to do
• CPI report was slightly higher than we would have liked but we’ll tear into it
• I’ll certainly serve to the end of my term and that’s all I’m focused on (not what he plans afterwards)

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