Fed's Powell says tools can't ease supply constraints

(Updated - November 3, 2021 3:26 PM EDT)

(Updated - November 3, 2021 3:09 PM EDT)

(Updated - November 3, 2021 2:43 PM EDT)

(Updated - November 3, 2021 2:40 PM EDT)

(Updated - November 3, 2021 2:36 PM EDT)

Fed's Powell Begins Press Conference

• Economy Ha Made Progress Toward Goal
• Policy to continue to provide support for recovery
• Economic progress reflects progress on vaccines
• Activity restrained by supply constraints, bottlenecks
• aggregate demand very strong
• economic growth should pick up this quarter
• demand for workers very strong
• participation in labor market subdued due to pandemic factors
• impediments to labor supply should diminish
• supply/demand imbalances contribute to price increases
• inflation well above goal
• constraints lasted larger than anticipated
• tools can't ease supply constraints
• see inflation easing toward 2% long-run goal
• timing highly uncertain
• will use tools if inflation exceeds goals
• confirms reduction of asset purchases
• sees similar reduction in pace of asset purchases
• prepared to adjust pace of buying depending on economy
• pace of taper suggest end of taper by middle of 2022
• focus on tapering asset purchases, not time yet to raise interest rates
• inflation will decline from today's elevated levels
• can be patient on rates
• policy will adapt
• possible to have maximum employment next year
• wages moving up strongly
• no evidence of wage-price spiral
• inflation we're seeing isn't due to tight labor market
• notes Fed's goals are in tension
• will use risk management
• prepared to speed, slow asset pace depending on outlook
• won't surprise market with change in pace
• took step back from transitory
• When U.S. reaches max jobs, possible inflation test met
• haven't focused on liftoff test
• by many measures, we're at a very tight labor market
• issue is how persistent aspects of tight labor market are
• appropriate to be patient
• time will tell us more on inflation
• don't think we're behind curve, Fed well position
• Policy will adapt and has adapted to inflation, supply
• expects labor force participation to pick up
• many higher wages are for job switchers
• Fed's Powell ends press conf.

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