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Powell: Would 'love' clarity on marijuana; wage growth is 'bit of a puzzle'

The Federal Reserve's Federal Open Market Committee decided to raise its target federal funds rate for the second time in 2018. This live blog of Fed Chairman Jerome Powell's press conference following the announcement will not be updated further.

2:34 p.m.: Powell said he will begin doing press conferences after each FOMC meeting in January, as opposed to the current practice of every other FOMC meeting. "That will give us more opportunities to explain our actions and to answer your questions," he said. The move is aimed at improving the Fed's communications and "does not signal anything" about its monetary policy actions, he added.

2:36 p.m.: "After many years of inflation below our objective, we do not want to declare victory," Powell said regarding inflation being near the Fed's 2% target.

2:39 p.m.: The Fed removed forward guidance language signaling stimulative monetary policy in the future. Powell said the Fed will likely increase the federal funds rate to "well within the range" of its estimates of the longer-run level "over the next year or so."

2:40 p.m.: The FOMC will reduce the interest rate it pays on excess reserves that it holds for banks, Powell said. "This minor technical adjustment has no bearing on the appropriate path of the federal funds rate or financial conditions more generally," he said.

2:44 p.m.: Powell said there is a "range of views" in the FOMC about the recent tax cuts' effects, though committee members generally think the cuts will "provide meaningful support" to demand in the coming months.

2:45 p.m.: The Fed is "discussing very actively" how many more rate hikes it will take to get to a neutral level in the federal funds rate, Powell said, adding that officials "don't have an exact sense" of what that figure is.

2:46 p.m.: Powell said the Fed is following debates regarding alternatives to its 2% inflation target, but that discussion is "not something that we have on the calendar right now."

2:49 p.m.: Policymakers are "beginning to hear reports of companies holding off on making investments" as trade uncertainty continues, the Fed chairman said. But Fed officials have not seen that reflected in the data, which shows "the economy is very strong." He added, "We really don’t see it in the numbers. It's just not there."

2:55 p.m.: Wage growth remains modest, the Fed chairman noted, adding that he "would've expected wages to react more" to the falling unemployment rate. "I wouldn't say it's a mystery, but it's a bit of a puzzle."

3 p.m.: Powell described the change to interest on excess reserves as a "minor technical adjustment" to ensure the effective federal funds rate returns to the midpoint of the Fed's target range. "We don't expect to have to do this often or again, but we're not sure about that. If we have to do it again, we'll do it again."

3:03 p.m.: The Fed is still "learning about the real location" of the natural rate of unemployment and how tight the labor markets can get, Powell said. But Fed officials do not project inflation "will take off" even if the unemployment rate remains low, he added.

3:07 p.m.: Powell would like to see clarity on how federally chartered banks should handle marijuana-related businesses in states where marijuana is legal. "Our mandate has nothing to do with marijuana, so we just would love to see it clarified," he said.

3:11 p.m.: Gradual rate hikes remain appropriate, the Fed chairman said, noting that some encouraged the Fed to hike rates faster in the past and he is "really glad we didn't." He added, "I think we've been patient. I think that patience has borne fruit."

3:16 p.m.: The Fed chairman declined to weigh in on trade discussions, saying that policy is the executive branch's job. "I'm really committed to staying in our lane."

3:20 p.m: The yield curve's flattening "makes all the sense in the world," given that the Fed has been hiking rates and therefore shorter-term interest rates have been going up, Powell said. However, he noted there is more uncertainty on why longer-term rates have remained subdued.