Fed Chairman Powell reiterated support for gradual hikes
Fed Chairman Powell reiterated support for gradual hikes in his speech on Monetary Policy and Risk Management at a Time of Low Inflation and Low Unemployment at the 60th annual NABE meeting, as the Fed looks to balance the risks of these "extraordinary times" of "low inflation and very low unemployment." The economy is is seeing a "remarkably positive outlook" currently, and is operating with limited slack. He see no sign of a big change in long term inflation expectations, and a big shift is unlikely if expectations are anchored, and that's the "key," anchored expectations. The recent rise in wages is welcome. But, higher wages alone need not be inflationary. The Fed will act with authority if inflation expectations start to sift. The Phillips Curve is neither dead nor showing an inflation surge, he added. Powell's comments are consistent with the path seen coming out of the September 25, 26 FOMC, and looks to remain steady as she goes through the rest of the year and in early 2019.