FED Chairman Jerome Powell Speaks LIVE at the NABE Conference: Here’s What He Says

Federal Reserve Chairman Jerome Powell is speaking today at the National Association for Business Economics (NABE) annual conference, an event expected to provide significant insight into the central bank’s monetary policy direction.

Here are his remarks (will be updated):

• Risks are two-way and decisions will be adjusted based on each meeting.
• If the economy develops broadly as expected, policy will gradually shift to a more neutral stance.
• The U.S. economy is in good shape; we intend to use our tools to keep it that way.
• Labor market conditions are strong and the labor market is roughly balanced.
• We don’t think we need to see further cooling of the labor market to achieve our 2% inflation target.
• My colleagues and I have greater confidence that inflation can continue to grow towards the 2% target.
• The decline in inflation has a broad basis, and recent data show further progress in achieving the goal of a sustained return to 2%.
• Housing services inflation will continue to decline as long as the rental growth rate for new tenants remains low.
• The 50 basis point rate cut reflects the growing confidence that appropriate policy adjustments can maintain a strong labor market and inflation toward the target.
• Good progress has been made in restoring price stability without causing a significant increase in unemployment.
• Risks to achieving employment and inflation goals are “roughly balanced.”
• The Fed encourages bankers to work with customers affected by the hurricane.
• Ensure that there is enough cash for transactions in areas with power outages through major reserve banks.
• The revision of gross domestic income (GDI) eliminates the downside risks that the Fed is considering.
• The upward revision of personal income also eliminates potential downside risks.
• The revision of the savings rate also shows that consumption can be sustained at a healthy level.
• We are closely watching productivity and it is not yet possible to judge whether the recent improvements will continue.
• The Fed is not in a hurry to cut interest rates quickly and will make decisions based on data.
• The interest rate cut process will be gradual “over a period of time” and there is no need to rush.
• There will be two employment reports and one inflation report released before the November meeting.
• All factors will be considered in the November interest rate decision.
• If the economy develops as expected, there will be two more interest rate cuts this year, with a total of 50 basis points.

Recent economic data paints a picture of decelerating price growth and a more moderate job market. Inflation, as measured by the Fed’s preferred gauge, the core Personal Consumption Expenditures (PCE) price index, rose a mere 0.1% in the latest reading, defying expectations of a 0.2% increase. This unexpectedly low figure has bolstered confidence among policymakers that the aggressive interest rate hikes implemented over the past year are bearing fruit.

The labor market, while still robust, is exhibiting signs of easing. Job growth has significantly slowed, averaging 116,000 new jobs per month over the past three months – a sharp decline from the over 200,000 monthly average seen last year. The unemployment rate has also risen to 4.2%, up from a historic low of 3.4% in 2022.