As Powell delivered his opening remarks, new job openings data showed little progress on one measure the Fed has focused upon, with employers still holding 1.9 jobs open for each unemployed person, well above pre-pandemic norms.
At the margins, however, some of the data did move in ways consistent with the softer job market the Fed hopes will develop. Overall job openings dropped slightly. The rate at which workers were quitting continued a gradual decline, a sign some of the pandemic job-hopping had slowed, while the layoffs right increased. Powell's message to Congress this week has reset expectations of where the Fed is heading, with his blunt assessment that "the ultimate level of interest rates is likely to be higher than previously anticipated" because inflation is not falling as fast as it seemed to be just a few weeks ago. Along with what rate futures markets now expect to be a half-percentage-point rate hike at the upcoming Fed meeting, policymakers will update projections on how high rates will ultimately need to be increased in order to squelch inflation. In their last set of projections, in mid-December, the median estimate of the high point of the Fed's benchmark overnight interest rate was between 5.00% and 5.25%, versus the current 4.50%-4.75% range. (Reporting by Howard Schneider, Ann Saphir and Lindsay Dunsmuir; Writing by Dan Burns and Paul Simao)
