Fed's Monetary Policy Report repeated the economy remains solid
Fed's Monetary Policy Report repeated the economy remains solid and the labor market has continued to strengthen, while inflation has been running below the longer run 2% target. It also included the usual buzz words, that the stance of policy is appropriate, and indicated that the increased uncertainties abut the global and domestic outlook had caused it to shift from a "patient" stance to act as "appropriate." This text will be the template for Chair Powell's Congressional testimony next week, and with little left on the docket to provide information, analysts'll look to how he nuances the events since the June FOMC to gauge his thinking into the July 30, 31 policy meeting. With the June jobs report and the trade truce in hand, and with some downshifting in the geopolitical angst that dominated into the G20, Powell may suggest less need for the much anticipated easing. This will be his last best chance to guide market expectations. Along with Powell testimony next week, there will be Fedspeak from the dovish dissenter Bullard, as well as comments from Williams, Bostic, Barkin and noted doves Kashkari and Evans (he is also a voter this year).