Policymakers are taking a meeting by meeting approach to assessing the need for additional rate hikes, Jerome Powell told reporters on Wednesday, after the Fed raised rates to the highest in 22 years.

Bringing inflation back down to target will likely require a period of below-trend growth and “some” softening of labor market conditions, he reiterated.

Asked by CNBC’s Steve Liesman if the Fed is, in fact, done, or if more hikes are on the way, and also whether the cadence is now definitively every other meeting, Powell said there’s been no firm decision to switch to an every-other-meeting approach. All meetings are still live, he indicated, in a point he’d return to several times throughout Wednesday’s torturously repetitive proceedings.

The Fed has made “no decisions” about any future meetings Powell emphasized, calling the June CPI report “better than expect[ed] for a change.” Still, it’s “only one month’s data.” The Fed needs to see more. Fortunately, he remarked, there’s plenty of data on the way between now and the September gathering. He mentioned Friday’s ECI report.

“It’s certainly possible” that the Fed could hike in September, he told Liesman. But it’s also possible to “hold steady.” He said that in the Committee’s view, monetary policy is now restrictive. Not everyone would necessarily agree, or at least not wholeheartedly.

While addressing a question about the length of the “lags” between tightening and its impact on the real economy, Powell mentioned the real Fed funds rate, which he suggested should be measured using a year-ahead gauge of consumer inflation expectations. Currently, real Fed funds is “well above estimates of the longer-term neutral rate,” he declared.

Regular readers will recall that I discussed just that, and at some length, in the July FOMC preview. The figure above gives you a sense of how restrictive Fed policy is based on Powell’s measurement. Crucially, it depends on whether the neutral rate is properly estimated. If r-star is materially higher than the current estimate, Fed policy isn’t restrictive.

Nick Timiraos asked about market suspicions that the Fed’s inflation forecasts are too high looking out several months. Should inflation fall more than the Fed expects, Timiraos wondered if the Committee would be satisfied with that progress, or whether decelerating growth and labor market softness are prerequisites for declaring the job mostly finished.

It’s hard to pick the pieces apart, Powell responded. The Fed is looking at the totality of data and making an “overall judgment.” “[It’s] really dependent so much on the data,” he told Timiraos. “And we just don’t have it yet.”

One reporter asked how Americans are actually harmed by, say, 3% inflation if consumer confidence is rising and real wage growth is positive. It was a good question, and Powell didn’t have a great answer.

Disinflation on the headline gauge will “strengthen the broad public sense that inflation is coming down,” he began, on the way to a mostly incoherent word salad about two-sided risks. “Certainly,” the Fed will have to hold policy in restrictive territory for some time, he concluded.

Asked how much unemployment the Fed is willing to trade to “get that last mile” towards 2%, Powell was noncommittal. “It’s not that we’re aiming to raise unemployment,” he said. “We have to be honest about the historical record,” which suggests some labor market softening is unavoidable. “Whatever the short-term social consequences” of a rising unemployment rate, they’re outweighed by the longer-term social consequences of not getting inflation under control, he insisted.

Another reporter asked how Powell can square the notion of a “live” September meeting with a more gradual pace of hikes given that a hypothetical move in September would make two in a row. Powell said a slower pace doesn’t necessarily mean every other meeting. “I do think it makes all the sense in the world to slow down,” he was quick to add.

Still another reporter wondered about the tweak to the Fed’s language around the pace of economic expansion. She cited the Barbie movie’s box office numbers as evidence that the economy might be too hot. Is robust growth “a problem?” she wondered. “Or is it good news” because it speaks to better soft landing odds?

The overall resilience of the economy is a good thing, Powell confirmed. But, he cautioned, it does increase the odds of higher inflation and a monetary policy response “at the margin.”

The Washington Post‘s Rachel Siegel asked how much credit the Fed deserves for the disinflation the economy has seen so far. “Yeah,” Powell said, flatly. “Interesting question.”

“We’ve always expected that the disinflation process [would come] both from normalization of pandemic supply-demand conditions” and restrictive policy, he responded, after collecting himself. “Clearly, for goods, supply conditions are playing an important role. Monetary policy will play an important role in non-housing services.”

Siegel pressed: Does core inflation rely more heavily on monetary policy? Powell repeated himself: “I think monetary policy is going to be important going forward.”

Asked later about the prospect of rate cuts in 2024, Powell said, “We’ll be comfortable cutting rates when we’re comfortable cutting rates.”