Federal Reserve Chair Jerome Powell speaks after Fed holds interest rates steady — 1/31/2024

Federal Reserve Chairman Jerome Powell has given a press conference discussing the current state of the US economy and the outlook for monetary policy. Here are the key points from his remarks:

• Powell emphasized the Federal Reserve's commitment to its dual mandate of promoting maximum employment and stable prices for the American people.
• He acknowledged that the economy has made progress towards these objectives, with inflation easing without a significant increase in unemployment.
• However, he noted that inflation is still too high and there is uncertainty about the path forward. The Federal Reserve is fully committed to returning inflation to its 2% goal.
• The Federal Open Market Committee (FOMC) decided to leave the policy interest rate unchanged and to continue reducing its securities holdings. Monetary policy has been tightened significantly over the past two years, with the policy rate now in restrictive territory.
• Recent economic indicators suggest solid GDP growth and improving supply conditions, but the housing sector has been subdued due to high mortgage and interest rates.
• The labor market remains tight, but supply and demand are coming into better balance. Wage growth has been easing, job vacancies have declined, and labor demand still exceeds the available supply of workers.
• Inflation has eased but remains above the 2% target, with total PCE prices rising 2.6% over the past year. Long-term inflation expectations remain well anchored.
• The Federal Reserve's monetary policy actions will be guided by its mandate to promote maximum employment and stable prices. The Committee is aware of the significant hardship caused by high inflation and is committed to returning inflation to its target.
• The timing of rate cuts and adjustments to the balance sheet runoff will depend on data, with the Committee carefully assessing the incoming data, the evolving outlook, and the balance of risks.
• Powell mentioned that he is not focused on another term as Federal Reserve Chairman at this time and is focused on doing his job.
• The Federal Reserve values input from business leaders and stakeholders to gain a better understanding of the economy.
• Ultimately, the Federal Reserve aims to achieve its goals of maximum employment and price stability and will make decisions based on data and the overall economic outlook.

Overall, Powell emphasized the need to monitor inflation and gain greater confidence that it is moving sustainably towards the 2% target. The Federal Reserve will continue to assess the data and make decisions on monetary policy accordingly.