On the June FOMC

The elimination of the “some time” language that has been in every FOMC statement since March 2014 leaves no forward guidance at all, for the first time since December 2008. There seems to be little reason for it, as the “dotplots” show almost no change versus March in the out-years. The untrue statement that policy remains “accommodative” is still there. The economic outlook in the statement was very upbeat. But the 2019 “dotplot” only upticked slightly, still implying less than one-and-a-half 25 bp rate hikes by year-end. Powell was smoother in the press conference than in March, and offered sensible views about the importance of the neutral rate of interest, and the unimportance of the Phillips Curve as policy benchmarks. He is learning on the job.