Federal Reserve press conference, 2022-06-15 — Chair Jerome Powell

Question (Steve Liesman, CNBC): But does 3.8 percent, 4 percent get it done? Does it get the job done on breaking the back of inflation?
Answer: I think it’s certainly in the range of plausible numbers. I think we’ll know when we get there really. I mean, honestly, though, that would be—you would have positive real rates, I think, and inflation coming down by then. I think you’d have positive real rates across the [yield] curve. I think that the neutral rate is pretty low these days. So I would think it would, but you know what? We’re going to find that out empirically. We’re not going to be completely model driven about this. We’re going to be looking at this, keeping our eyes open, and reacting to incoming data both on financial conditions and on what’s happening in the economy.

Question (Edward Lawrence, Fox Business): Thanks, Chair Powell. Edward Lawrence with Fox Business. I wanted to ask you—you talked about CPI going to 8.6 percent, that retail sales surprised the market by falling and then revisions to the previous months were down. Are you hearing from contacts about consumers slowing spending or changing their habits?
Answer: So we’re, of course, watching very, very carefully for that and looking at the retail—the big store numbers and all that kind of thing. And so I—but I think the fair summary of what we see is, you see continuing shifts in consumption, you see some things getting—sales going down, but overall spending is very strong. The consumer’s in really good shape financially. They’re spending. There’s no sign of a broader slowdown that I can see in the economy. People are talking about it a lot—consumer confidence is very low. That’s probably related to gas prices and also just stock prices to some extent for other people. But that’s what we’re seeing. We’re not seeing a broad slowdown. We see job growth slowing, but it’s still at quite robust levels. We see the economy slowing a bit but still growth levels—healthy growth levels.

Question (Christopher Rugaber, Associated Press): Thank you. Chris Rugaber, Associated Press. You have talked about inflation a few times and mentioned oil prices, China lockdowns. But aside from rises in commodity prices such as gas prices, we’re also seeing stickier measures of inflation increasing, such as the Cleveland Fed’s median and trimmed mean CPIs. I mean, how persistent do you see those underlying measures of inflation, and how do you expect to—where do you see those going in the near future?
Answer: So, as I mentioned, I think, in my opening statement, inflation has started—it started off in quite narrow, very directly pandemic-related areas, and it’s spread now broadly across the economy and into the services sector as well. It was really in the goods sector at the beginning. And, particularly, you’re seeing in travel now, if you’ve flown on a plane lately—planes are very full, and plane tickets are very expensive. Some of that will be pass- through of energy prices, but it’s—so you’re experiencing services inflation. Shelter inflation is high. So the question—and then you see the Cleveland measure going up, and many other measures are going up. So it’s a time when we’re not seeing progress and we want to see progress, and that’s really another part of why we did what we did today and why the SEP looks like it does. We see it as appropriate to get the policy rate up to restrictive levels, which would be, in the thinking of the Committee, somewhere in the range of 3 to 3½ percent by year-end. And then after that, you see what the rest of the SEP says. So I hope that’s responsive to your question.