Press conference exchange between NICK TIMIRAOS and Fed Chair Jerome Powell:

user: Nick Timiraos of the Wall Street Journal. Chair Powell, if I look at the, the rate projections, I see 15 of the 19 that are anticipating either one or two cut—two cuts this year—fairly evenly split between the two. And so I wonder if you could explain a little more the nuances or the differences there. Would two or three more inflation readings like the one that we saw this morning make a September interest rate cut possible?

assistant: So as far as the SEP part of that is concerned—as you know, I talk to—I talk to all of the other participants on the FOMC every cycle, and we talk about their Summary of Economic Projections and, and the dot plot—and, you know, their dot plot and everything. And what you—what I hear and see is that people are looking at, at, you know, a range of plausible outcomes. And in many cases, they’re—they’re thinking, “I don’t really”— you know, “I can’t really distinguish between two of these. They’re so close for me.” These are very close calls, but we ask them to write down the most likely one—so they do. And as, I think, you’ve, you’ve—as you’ve said, there’s 15 of the 19 are, are clustered around one or two. So I think I would look at, at all—I’d look at all of them as plausible, but I’d look at—so I think that does tell you what the Committee thinks. But what everyone agrees on is, it’s going to be data dependent. No one—no one brings to this or takes away from it that is on the Committee a really strong commitment to a particular rate path. It’s actually just their forecast and their—it’s a combination of their forecast and their own reaction function. But, again, everyone would say that this is very data dependent, and I don’t hold it with high confidence. And I think if you’re looking for—and, and don’t really think that they’re—they’re not trying to send a strong signal that “this is what I think is the right thing.” It’s just what they think at a given moment in time, subject to data. In terms of, you know, future meetings, we haven’t, you know—we don’t—we don’t try to—we don’t make decisions about future meetings until we get there. I think in terms of what we need to see, I mentioned it earlier—we, we want to—we want to gain further confidence. Certainly, more good inflation readings will help with that. I’m not going to be specific about how many because, you know, really, it’s going to be not just the inflation rating—readings—it’s going to be the totality of the data: what’s happening in the labor market, what’s happening with the balance of risks, what’s happening with the forecast, what’s happening with growth. You look at all of that, and you ask, “Are we confident? Have we reached an appropriate level of confidence that inflation is moving down sustainably to 2 percent, or, alternatively, do we see really unexpected signs of weakness in the labor market that would call for a response?”—which is—which is another thing that could, could happen. But, again, we don’t see that. And I—we do see today’s—we see today’s report as, as progress and as, you know, building confidence. But we, we don’t see ourselves as having the confidence that would warrant—you know, that would warrant beginning to, to loosen policy at this time.

user: And if I could quickly follow up—did, did you or any of your colleagues change your interest rate projections after 8:30 or whenever you got the inflation numbers today?

assistant: So we—this happens too often, but it, it does happen. It just is, you know—data came—I think it happened a couple of meetings ago—a few meetings ago. So when that happens—when there’s an important data print during the meeting, first day or second day— what we do is, we, we make sure people remember that they have the ability to update. We tell them how to do that. And, and some people do; some people don’t. Most, most people don’t. But I’m not going to get into the specifics, but you have the ability to do that. So that, you know—what’s in the SEP actually does reflect the data that we got today to the extent you can, you know, reflect it in one day. I think we’ll, you know—you will see PPI tomorrow. We’ll know more about the PCE inflation reading as the month goes on. But the initial CPI reading and its, you know, first-level translation to, to PCE inflation we did have this morning. We were briefed about it, and people were able to consider whether they should make changes. And, as I said, you know, some people generally do, but most people generally don’t.