2019 begins the Era of Powell Transparency.  In his first of eight “live” FOMC meeting press conferences this year, Chairman Powell stated that the FOMC is “committed to clearly explaining what we are doing and why we are doing it, both regarding the path of rates and also regarding management of the balance sheet. We believe that this transparency is how we can best contribute to macroeconomic stability”.

In Chairman Powell’s Press Conference Opening Remarks , he used the word “patient” five times regarding rate hikes going forward after the FOMC’s decision to hold the rates unchanged.  The following summarizes the main points of his press conference’s opening remarks, which were generally viewed as more “dovish” than expected by the market.

FOMC is done raising rates for now and suggests that the Committee is not in a rush to raise rates.  By the end of March, we will have more clarity regarding the U.S.-China trade dispute/market reactions and the outcome from a hard, soft or delayed Brexit.  With these and more U.S. economic data released by then, which would reflect the impact from the partial government shutdown, the FOMC will be more informed, and as such, we do not expect another rate hike until June or later this year.

Furthermore, the Committee recognized that the post Global Financial Crisis world sets conditions that require a larger Fed balance sheet, and Chairman Powell stated that the end of the balance sheet normalization process will be completed sooner than later.  This is also constructive for the market from a financial condition standpoint.

Here is our summary to his press conference prepared remarks.