Earlier: Fed's Powell: Brexit vote has shifted global risk further to downside

Powell now in the Q&A

  • Long-run rate may be lower than the 3% Fed dot plot
  • Markets unusually responsive to shifts in policy path view
  • We're a long way form having another financial crisis
  • Financial conditions modestly tighter since Brexit vote
  • Financial conditions have tightened since 2014 to equivalent of several rate hikes, particularly through appreciation of the dollar

More:

  • Higher USD may translate into as much as a 0.25 point reduction in inflation rate, leaving Fed not that far from target
  • economic strength is only way to achieve higher rates
  • Little risk of deflation in the US as long as inflation expectations remain anchored