Chair Powell’s semiannual testimony to Congress – Nomura

Analysts at Nomura explained that Chair Powell’s testimony to the Senate Banking Committee provided few new insights into the course of Fed policy.  

Key Quotes:

“Powell’s prepared remarks and Q&A indicated no material shift from the outlook the FOMC presented at the June FOMC meeting. There was one notable change in Powell’s language. In his prepared remarks, he stated, “the FOMC believes that””for now””the best way forward is to keep gradually raising the federal funds rate.” The qualification of “for now” was new. It seems unclear why it was added.”

“During Q&A, Chair Powell avoided any suggestion that the Committee was leaning one way or another. Powell did not talk about the prospect of a “pause” in Fed hiking. On the other hand, he did not stress the potential risks of inflation and financial stability from firming  labor  markets. In this context, the addition of “for now” was, perhaps, meant to emphasize that the FOMC’s interest rate path is not completely on autopilot.”