Press conference exchange between HOWARD SCHNEIDER and Fed Chair Jerome Powell:

user: Hi. Howard Schneider with Reuters, and thanks for the time. I’m wondering—I mean, given the complexity about the first-quarter GDP and what lies ahead, I’m just wondering what your intuition tells you about the underlying direction of the economy right now. Many of your colleagues have said they feel growth is slowing. If so, do you have any sense of by how much, to what degree the slowdown may be? What does your gut tell you about how things are evolving out there?

assistant: My gut tells me that uncertainty about the path of the economy is extremely elevated and that the downside risks have increased. The risk is—as we pointed out in our statement, the risks—the risks of higher unemployment and higher inflation have risen, but they haven’t materialized yet. They really haven’t. They’re not, really not in the data yet, so that—and that tells me more than by intuition because I think—I think it’s obvious, actually, that the right thing for us to do is to—we’re in a good place. Our policy’s in a very good place, and the right thing to do is, is await further clarity. And I—you know, there’s— usually, things clarify, and that—the appropriate direction becomes clear. That’s what usually happens, right? Right now, it’s very hard to say what that would be. In the meantime, the economy is doing fine. Our policy isn’t—you know, it’s not highly restrictive. It’s somewhat restrictive. It’s 100 basis points less restrictive than it was in, you know, last summer. So we think it’s—we think it’s in a good place, and we think the appropriate thing is for us to wait and see and get more clarity about, about the direction of the economy.

user: Well, let me press you on this idea of the economy being fine right now, because, reading the Beige Book very closely the last time around, there was a lot of, you know, negative stuff, negative sentiment that was in there. And I know that everybody’s looking at soft data right now. You mentioned it yourself—that the sentiment’s sour. But the Beige Book was talking about, you know, the beginnings of layoffs in some industries, prices rising in, in some places, and an awful lot of investment decisions being, being pushed to the sideline. Doesn’t that point to a slowdown?

assistant: It may well. It just hasn’t shown up yet. And, and, you know, we all look at all these sentiments and read many, many individual comments just to get a better feel. And it—you know, businesses and households very broadly are concerned and, you know, postponing economic decisions of various kinds. And, yes, if that continues and nothing, nothing happens to alleviate those concerns, then you would expect that to begin to show up in economic data. It wouldn’t maybe show up overnight, but it would show up over weeks and months. And that may be what happens, but it hasn’t happened yet. And also, there are things that can happen that will—that will change that narrative. I mean, they haven’t happened, but it’s possible to imagine things. But in the meantime, yes, we’re watching it extremely carefully, like everyone is, but don’t see really much evidence of it in the actual economic data yet. And by the way, consumers keep spending, credit card spending. It’s—you know, it’s still—it’s still a healthy economy, albeit one that is shrouded in some very downbeat sentiment on the part of people and businesses.