Takeaways from the FED's MPC speech Nov 23'

FED chair Powell gave the MPC speech on 1 Nov 23'. Here are some crucial points from his speech:

On recent events:

    >>> Economic activity expanding at a fast rate - factors: surge in consumer spending. However, housing markets flat; business investments flatting out

    >>> The labour market is tight but is balancing out. Nominal wage growth balancing. Unemployment is low and job vacancies still exceed the supply but have overall declined 

    >>> Inflation is moderating but still above expectations; PCE rose 3.45 while core PCE was at 3.7%; Longer-term inflation seems well-anchored

    >>> Tighness in labour market may lead to further tightening of monetary policy

    >>> Rise in long-term yields has effects on the tightening financial conditions and will also have an effect on the broader path of monetary policy, for example, higher mortgage rates 

    >>> Potential growth seems to be temporarily risen than usual (which is taken to be around 2%) due to changes in the labour market, supply chain etc

    >>> FED looks at a wide range of financial conditions, for example, the level of the dollar, level of rates, credit spreads etc. They look at long-term yield rates as well but not in entirety. 

On monetary policy :

    >>> Monetary policy unchanged

    >>> Monetary policy works with long and variable lags and committees and looking at that

    >>> Dot plots tell how the committee members think about the economy going ahead but it is not a hard plan. With time, changes in the overall conditions can have an impact on the economic forecast over the next meeting as well

    >>> Michigan Sentiments Survey (was said last year by Powell previously that it is a major survey that's been looked into) had a jump in 1-yr ahead expectations but Powell said it was a preliminary estimate and was revised later

Click here to listen to the speech