Fed watchers left puzzled by what Powell was trying to communicate

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For someone who prides himself on transparency, Federal Reserve Chairman Jerome Powell sure left people confused as to his intentions during a discussion in Dallas on Wednesday night.

Powell alongside Dallas Fed President Robert Kaplan discussed everything from the global economy to details about his previous job as a Fed governor. He emphasized the U.S. economy was strong while he had concerns about how long the recovery could last.

Read: Powell says he’s optimistic about the economy as he notes concerns from abroad

Here’s how Fed watchers interpreted his comments:

• “Although Powell had many opportunities to lean toward a more cautious policy stance, he largely stuck to his guns. When asked specifically about various risks to the outlook, Powell mostly just said that the Fed was ‘monitoring’ them. To the extent the markets

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were looking for signals of a less aggressive Fed, Powell’s remarks mostly disappointed. This gave a mildly hawkish tone to the evening.”—Michael Hanson, head of global macro strategy at TD Securities.

• “There might be just a hint of policy optionality here—at least of not getting too dug in on a particular policy path in a complex and dynamic environment—though this is very different from signaling a change of tack. Powell repeated that the Fed sees two-sided risks to the sustainability of the expansion and needs to balance downside risks against upside risks of overheating or future financial excesses.”—Krishna Guha, head of global policy/central bank strategy at Evercore ISI.

• “Powell offered no notable policy innovations, but his remarks were on balance slightly dovish, in our view. It was a matter of emphasis—what he chose to focus on and what he chose to avoid. Powell stressed the objective of “extending the expansion” as opposed to guarding against ‘overheating.’ In his Jackson Hole speech, he highlighted the importance of ‘navigating between the shoals of overheating and premature tightening.’ [Wednesday], he stuck with that framework but seemed more focused on the first objective, ‘extending the expansion’—giving his comments a modestly dovish tone.”—Lewis Alexander, chief U.S. economist at Nomura.

• Tim Duy, a University of Oregon economist with a popular blog about the Fed, said Powell’s comments should be taken in the context that the central bank is no longer offering forward guidance.

• Mike Larson, a senior analyst at Weiss Ratings, employed an emoji to help describe Powell’s discussion.