Federal
Reserve
Chairman
Jerome
Powell
said
Thursday
that
he
and
his
fellow
policymakers
are
encouraged
by
the
slowing
pace
of
inflation
but
are
unsure
whether
they’ve
done
enough
to
keep
the
momentum
going.
Speaking
a
little
more
than
a
week
after
the
central
bank
voted
to
hold
benchmark
policy
rates
steady,
Powell
said
in
remarks
for
an
International
Monetary
Fund
audience
in
Washington,
D.C.,
that
more
work
could
be
ahead
in
the
battle
against
high
prices.
“The
Federal
Open
Market
Committee
is
committed
to
achieving
a
stance
of
monetary
policy
that
is
sufficiently
restrictive
to
bring
inflation
down
to
2
percent
over
time;
we
are
not
confident
that
we
have
achieved
such
a
stance,”
he
said
in
his
prepared
speech.
For
the
second
time
in
recent
weeks,
a
public
address
from
Powell
was
interrupted
by
climate
protesters.
He
briefly
left
the
stage
before
resuming.
The
speech
comes
with
inflation
still
well
above
the
Fed’s
long-standing
goal
but
also
considerably
below
its
peak
levels
in
the
first
half
of
2022.
In
a
series
of
11
rate
hikes
that
constituted
the
most
aggressive
policy
tightening
since
the
early
1980s,
the
committee
took
its
benchmark
rate
from
near
zero
to
a
target
range
of
5.25%-5.5%.
Those
increases
have
coincided
with
the
Fed’s
preferred
inflation
gauge,
the
core
personal
consumption
expenditures
price
index,
to
fall
to
an
annual
rate
of
3.7%,
from
5.3%
in
February
2022.
The
more
widely
followed
consumer
price
index
peaked
above
9%
in
June
of
last
year.
Powell
said
that
inflation
is
“well
above”
where
the
Fed
would
like
to
see
it
while
describing
policy
as
“significantly
restrictive.”
“My
colleagues
and
I
are
gratified
by
this
progress
but
expect
that
the
process
of
getting
inflation
sustainably
down
to
2
percent
has
a
long
way
to
go,”
he
said.
“We
will
keep
at
this
until
we
succeed,”
he
later
added,
saying
the
Fed
is
focused
on
whether
rates
need
to
go
higher
and
how
long
they
need
to
stay
elevated.
Stocks
headed
lower
after
the
speech,
with
the
Dow
Jones
Industrial
Average
down
close
to
200
points.
Treasury
yields
lurched
higher
after
declining
for
most
of
the
past
three
weeks,
propelled
up
in
large
part
after
a
poorly
received
30-year
bond
auction.
“Chairman
Powell
issued
a
warning
to
investors
too
giddy
on
the
prospect
of
rate
cuts
next
year,”
said
Jeffrey
Roach,
chief
economist
at
LPL
Financial.
“The
Fed
will
be
true
to
its
mandate
and
hike
further
should
inflation
reaccelerate.”
As
he
has
in
recent
speeches,
Powell
stressed
that
the
Fed
nevertheless
can
be
cautious
as
the
risks
between
doing
too
much
and
too
little
have
come
into
closer
balance.
He
said
the
Fed
is
attuned
to
the
rise
in
Treasury
yields.
“If
it
becomes
appropriate
to
tighten
policy
further,
we
will
not
hesitate
to
do
so,”
he
said.
“We
will
continue
to
move
carefully,
however,
allowing
us
to
address
both
the
risk
of
being
misled
by
a
few
good
months
of
data,
and
the
risk
of
overtightening.”
“Monetary
policy
is
generally
working
the
way
we
think
it
should
work”
Powell
said
during
a
discussion
following
his
speech.
Markets
are
largely
convinced
the
Fed
is
through
hiking
rates.
Futures
pricing,
according
to
the
CME
Group,
indicates
less
than
a
10%
probability
that
the
FOMC
will
approve
a
final
rate
hike
at
its
Dec.
12-13
meeting,
even
though
committee
members
in
September
penciled
in
an
additional
quarter
percentage
point
rise
before
the
end
of
the
year.
Traders
anticipate
the
Fed
will
start
cutting
next
year,
probably
around
June.
Powell
noted
the
progress
the
economy
has
made.
Gross
domestic
product
accelerated
at
a
“quite
strong”
4.9%
annualized
pace
in
the
third
quarter,
though
Powell
said
the
expectation
is
for
growth
to
“moderate
in
coming
quarters.”
He
described
the
economy
as
“just
remarkable”
in
2023
in
the
face
of
a
broad
consensus
that
a
recession
was
inevitable.
Unemployment
remains
low,
though
the
jobless
rate
has
risen
half
a
percentage
point
this
year,
a
move
commonly
associated
with
recessions.
But
Powell
noted
that
the
Fed
is
“attentive”
that
stronger-than-expected
growth
could
undermine
the
fight
against
inflation
and
“warrant
a
response
from
monetary
policy.”
He
also
pointed
out
that
improvements
in
supply
chains
have
helped
ease
inflation
pressures,
but
“it
is
not
clear
how
much
more
will
be
achieved
by
additional
supply-side
improvements.
Going
forward,
it
may
be
that
a
greater
share
of
the
progress
in
reducing
inflation
will
have
to
come
from
tight
monetary
policy
restraining
the
growth
of
aggregate
demand.”
The
remarks
are
part
of
a
broader
presentation
he
is
giving
to
the
Jacques
Polak
Annual
Research
Conference.
One
broad
policy
topic
he
addressed
was
the
challenge
posed
by
keeping
rates
anchored
near
zero,
where
they
were
before
the
inflation
surge.
Powell
said
it
is
“too
soon”
to
say
whether
zero-rate
challenges
are
“a
thing
of
the
past.”
