FOMC Chairman Jerome Powell commented on the policy outlook after the Fed decided to raise the policy rate by 25 basis points to a 5-5.25% range at the end of the May meeting. Traders and investors are reminded that every word Powell says at the moment has a big impact on the S&P 500 and the stock market. 

Key Quotes

“We’re trying to reach a sufficiently restrictive level and then stay there for an extended period of time to reduce inflation.”

“We have to balance the risk of not doing enough with the risk of slowing economic activity too much.”

“We believe that raising the rate and changing the text of the statement is the right way to balance that.”

“It will be an ongoing process of evaluating the appropriate rate level.”

“The policy is tight.”

“The real rates are about 2%, which is well above the neutral rate.”

“We may be at a fairly restrictive level, maybe not very far from it.”

“We have a goal of getting to 2%, it’s going to take some time and it’s not going to be a smooth process.”

“Wages are still above the 2% inflation target.”

“The labor market is very, very strong and inflation is high and well above the target.”

“Right now we need to focus on lowering inflation.”

Earlier, we reported that the dollar has no real competitor.