In his speech at the Chicago Economic Club, Jerome Powell, the Chairman of the Federal Reserve, made several important statements regarding the state of the US economy.
Current Economic Policy
Powell noted that the current monetary policy is well-placed and that the Fed will await clearer economic data before considering changes to its policy.
State of the Economy and Risks
Despite heightened uncertainty and ongoing risks, the US economy remains 'strong.' Employment is near record levels, and inflation is slightly above the 2% target. However, Powell warned of potential slowdowns in economic growth in the first quarter of 2025 due to high import figures.
Future Prospects and Conflicts of Goals
The Fed Chair reported that personal consumption expenditures are expected to grow by 2.3%, and core PCE by 2.6%. However, high tariffs could lead to higher inflation and slower economic growth. Powell emphasized that the Fed must maintain long-term inflation expectations, even if this creates a conflict with other economic goals.
Thus, Jerome Powell's speech highlights the current achievements and potential challenges in the US economy and demonstrates the Fed's readiness to act in uncertain conditions.
