The Fed’s Jerome Powell and the ECB’s Christine Lagarde speak at the ECB Banking Forum today. Here are some of their comments:
- The U.S. economy remains strong and the labor market has rebalanced. U.S. inflation has likely peaked
- Inflation could return to 2% by the end of next year or the year after.
- We can “take our time and do it right.”
- We need data similar to what we have seen recently.
The main takeaway from Jerome Powell’s comments is that disinflation appears to be picking up – a conclusion reached after the recent benign inflation numbers. Powell noted, however, that the Fed can take its time to ensure inflation gets closer to target, but he also suggested that a sharp deterioration in the jobs market could prompt action.
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