MEXICO: Banxico Revises Up Economic Growth Estimates and Inflation

Powell says re today's two dissents "it's an unusual situation where you have risks to both your employment mandate and your inflation mandate. That's the nature of a supply shock. And it's probably not surprising that there would be differences and different perspectives on that, as well as different views of where the neutral rate is, so different views of how tight policy is... I would call it one of the better meetings I can recall from that standpoint." He says that two participants (ie Waller and Bowman) "felt that the time had come to cut and for the reasons that they are going to express. I won't tell you the reasons. They will issue some kind of a thing in the next day or so" (referring to the traditional post-meeting statements from dissenters).

• Powell says that if you take the QCEW (annual payroll report) adjustment "seriously", payrolls growth "may be close to zero", but the unemployment rate is "still low". That's indicative of demand for workers slowing, but also the supply - so "it's in balance, oddly enough".
• "But I think you have to see that there are downside risks. You don't see weakening in the labor market, but I think you have got downside risks in a world where unemployment is being held down because both demand and supply are declining. I think it's worth paying close attention to... and we are." 

Powell on the US consumer: 

• "Consumer spending has been very, very strong for the last couple of years and ... repeatedly forecasters, not just us, had been forecasting it would slow down.
• And now maybe it finally has.... essentially you have a consumer that's in good shape and is spending, not at a rapid rate... it's one of the data points that we pay most careful attention to. And there's no question that it's slowed. And we are watching it closely."