Powell’s Press Conference Highlights
Federal Reserve Chair Jerome Powell reaffirmed the Fed’s commitment to achieving maximum employment and price stability in the best interest of the American people.
He stated that recent data show no significant change since the last meeting, and confirmed that the Fed has cut interest rates by 25 basis points to support its policy goals.
According to Powell, the U.S. economy is showing moderate growth, with low unemployment rates despite a slight slowdown in hiring and reduced labor demand.
He added that inflation has risen since the start of the year but remains lower than last year’s levels, and most forecasts indicate it will stabilize near the target.
Powell noted that some Fed members remain concerned that inflation could prove more persistent, yet the central bank is continuing to balance inflation and employment objectives carefully.
He also pointed out that tariffs have driven prices for certain goods higher, and while their effects are likely short-term, they could last longer than expected.
The Fed decided to end the balance sheet reduction process starting in December, with Powell emphasizing that the committee holds diverse views about the next steps. Any further rate cuts in December are not guaranteed, as decisions will depend on future data.
In response to journalists, Powell highlighted that artificial intelligence companies are major contributors to economic growth, acknowledging that the current economic environment poses real challenges, but the Fed aims to craft the best possible path forward.
He added that unemployment remains relatively low and that Fed members are working diligently for the well-being of Americans. The risks are now balanced between high inflation and slower employment growth, leading to a more neutral stance.
Powell confirmed that housing inflation is starting to cool, calling it a positive sign, though overall inflation remains above target.
He also addressed the impact of the government shutdown, noting that the lack of economic data complicates decision-making, but the Fed continues to analyze all available indicators to make informed choices.
The neutral interest rate is currently estimated between 3% and 4%, and Powell mentioned that the Fed is getting close to that range after two consecutive cuts totaling 50 basis points.
He assured that the U.S. financial system remains stable, with no excessive borrowing or signs of a bubble like the dot-com era.
Powell concluded that the overall economic outlook remains positive, with steady consumer spending and AI investments driving growth, while the Fed continues to strive for price stability and a strong labor market.
