Jerome Powell said that stablecoins are a form of money and the Fed should act as their regulator
1. Further rate increases are expected. The rate of increase will slow down. The Fed is not sure how high it will need to raise rates. Decisions will be made at each meeting.
2. To combat inflation, it is necessary to slow down economic growth.
The economy slowed last year but continues to grow at a "modest pace."
3. The collapse of SVB showed that there is a need for greater regulation/monitoring of medium-sized banks.
4. Basel III should be implemented, but the Fed does not expect capital requirements to be raised for many other than the largest US banks.
Basel III is a set of capital requirements in banking regulation that were recommended after the Great Financial Crisis to improve the ability of finance. systems to cope with shocks during times of economic stress.
Capital requirements are rules about how much 'high quality capital' banks must hold relative to their risk assets.
5. The labor market is still very strong and drives the economy.
There is evidence that supply and demand in the labor market are moving towards a "better balance", but demand for labor still far outstrips supply.
6. Inflation in the housing sector is expected to decline as supply and demand dynamics normalize.
7. The Fed still doesn't know how long it will be before the rate hikes fully impact the economy.
8. Fighting inflation is now a major goal as it remains well above the 2% target and continually surprises the Fed and all forecasters.
9. Balance sheet contraction will continue, but it will reach a level where the Fed will not want to limit bank reserve levels too much at the risk of causing liquidity problems in the financial system.
10. State The US budget is unsustainable and needs to be changed.
11. And, as always: “The banking system is reliable and stable.”
Markets are now pricing in a 77% chance of a 0.25% rate hike at the Fed's next meeting.