Thus Spake The Fed Chair

Fed Chair Jerome Powell is the high priest of monetary policy. His pontifications are carefully read and analyzed by his followers. We are among his followers because we are Fed watchers. Indeed, we often count how many times certain words appear in his public remarks.

The word “disinflation” was uttered 11 times at Powell’s press conference on February 1. He was the only one who mentioned the word at his presser. He repeatedly acknowledged that inflation was moderating but still had a ways to go before reaching the Fed’s 2.0% target. Nevertheless, Powell sounded much less hawkish than during his previous presser on December 14, 2022, when the word was mentioned only twice, both times by reporters.

In his congressional testimony today, Powell mentioned the word just once in his short prepared remarks with a hawkish spin: "That said, there is little sign of disinflation thus far in the category of core services excluding housing, which accounts for more than half of core consumer expenditures. To restore price stability, we will need to see lower inflation in this sector, and there will very likely be some softening in labor market conditions."

Powell's other hawkish prepared remarks were: