"We are navigating by the stars under cloudy skies"

I think the Powell speech was uneventful in the sense of telling us something new. He’s remaining noncommittal and flexible with what comes next, highlighted that they could hike again but not necessarily. He also talked about the tough part of their job now.

Leaving open the possibility of another rate increase, “We are prepared to raise rates further if appropriate.” But on the other hand, “Given how far we have come, at upcoming meetings we are in a position to proceed carefully as we assess the incoming data and the evolving outlook and risks.”

And even if they don’t hike again, they “intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective.” I think the important word here is ‘sustainably.’ As I’ve said before, there is one thing to see disinflation but there is a completely other thing to have inflation stay down.