Jerome Powell's address came after the announcement to keep interest rates unchanged. In his speech, he highlighted key aspects of the current economic landscape.
Key Takeaways from Powell's Speech
Powell emphasized that the economy is generally in good shape while inflation has significantly decreased but still exceeds the target of 2%. He noted that the labor market has reached or is near maximum employment levels.
Economic Risks and Threats
In his speech, Powell pointed to rising risks of both unemployment and inflation. He mentioned that trade volatility complicates GDP measurement. According to surveys, excessive tariffs are becoming the main factor influencing inflation expectations.
Monetary Policy Outlook
Powell stated that while the Fed is prepared to react to changes, the primary goal right now is to control inflation expectations. If significant changes in the economy occur, further actions may be taken, but for now, policy remains moderately restrictive.
Jerome Powell's speech highlights the current state of the economy and the risks facing the US financial system. Expectations for changes in monetary policy remain high despite the current hold on rates.
