Powell opening statement: Inflation has eased substantially but is still too high

• Recent indicators suggest economy still growing at a solid pace
• Consumer spending remains solid
• GDP has slowed but private domestic final purchases still growing at same pace as H2 2023
• Labor market has come into better balance but April and May jobs data still strong
• Unemployment rate ticked up but remains low
• A broad set of indicators suggest we’ve returned to where jobs market as on the eve of the pandemic, relatively tight but not overheated
• Inflation has eased notably
• More-recent readings on inflation have eased somewhat

Reactions to these headlines have been nearly nil, so far.

• Repeats that Fed will need greater confidence in inflation to cut rates, though most-recent numbers have showed modest further progress
• Will need to see more good data to bolster confidence on inflation

There was a bit of USD buying on this.

• Policy is well positioned
• We will continue to make decisions meeting by meeting

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