Press conference exchange between JEANNA SMIALEK and Fed Chair Jerome Powell:

user: Jeanna Smialek from the New York Times. Thanks for taking our questions. Obviously, in the statement and just in your remarks there, you note that you don’t want to cut interest rates without greater confidence that inflation is coming—coming down fully. I wonder—what do you need to see at this point to gain that confidence? And as you make those decisions, how are you weighing recent strong growth in consumer spending data against the solid inflation progress you’ve been seeing?

assistant: Sorry—say that last part again.

user: How are—how are you weighing the growth data and consumption data, which have been surprisingly strong, against inflation data?

assistant: Okay. So, what are we looking for to get greater confidence? Let me say that we have confidence. We’re—we’re looking for greater confidence that inflation is moving sustainably down to 2 percent. Implicitly, we do have confidence, and it has been increasing, but we want to get greater confidence. What do we want to see? We want to see more good data. It’s not that we’re looking for better data. It’s—we’re looking at continuation of the good data that we’ve been seeing, and a good example is inflation. So we have six months of good inflation data. The question really is, that six months of good inflation data—is it sending us a true signal that we are, in fact, on a path—a sustainable path down to 2 percent inflation? That’s the question. And the answer will come from some more data that’s also good data. It doesn’t—it’s not that the six-month data isn’t—isn’t low enough. It is. It’s just a question of, can we take that with confidence that we’re moving sustainably down to 2 percent? That’s really what we’re thinking about. In terms of, of growth, we’ve had strong growth. I mean, if you take a step back, we’ve had strong growth—very strong growth in real GDP last year—going right into the fourth quarter. And yet we’ve had a very strong labor market, and we’ve had inflation coming down. So I think—whereas a year ago, we, we were thinking that we needed to see some softening in economic activity—that hasn’t been the case. So I think we, we look at—we look at stronger growth. We don’t look at it as a problem. I think, at this point, we want to see strong growth. We want to see a strong labor market. We’re not looking for a weaker labor market. We’re looking for inflation to continue to come down, as it has been coming down for the last six months.

user: And I’m sorry. If I could just follow up very quickly, the—when, when you say that you want to make sure that it’s a true signal, is there anything that you’re seeing in the data that makes you doubt that it’s a true signal at this stage?

assistant: No, I think it’s—I, I would say it, it seems—it seems to be the likely case that, that we will achieve that confidence, but we have to achieve it, and we haven’t yet. And so—I mean, it’s a good story. We have six months of good inflation readings. But you can—and this—you can look behind those numbers, and you can see that a lot of it’s been coming from goods inflation, for example, and goods inflation running significantly negative. It’s a reasonable assumption that, over time, goods inflation will flatten out—probably approximate zero. That would mean the services sectors would have to contribute more. So, in other words, what we care about is the aggregate number—not so much the composition. But we, we just need to see more. That’s where we are, as a Committee. We need to see more evidence that confirms what we think we’re seeing and that tells us that we are on—gives us confidence that we’re on, on a path to—a sustainable path down to 2 percent inflation.