Chair Powell gloats on Fed's hard won credibility

Key takeaway from Chair Powell comments today

Labor demand supply is moving into better balance and wage growth is moving towards levels that would be more consistent with 2% inflation 

On inflation, core inflation ran at an annual rate of 2.5%. Better supply demand dynamics as the effects of pandemic recede , restrictive policy and significant tightening of financial conditions are putting downward pressure on economic activity and inflation.

Uncertainty about the economic outlook persist and growth in spending and output is expected to slow next year. Monetary Policy works with lags and the full effects of tightening are likely still to be felt. 

Fed continues to be in data dependent mode and while they await to put a flag on having won the inflation fight , they continue to guard against surprises and hence kept the room open for a hike. 

Manufacturing PMI came in at 46.70. 

US yields are lower on the day with US 10Y trading at 4.24%