Federal Reserve Chairman Jerome Powell said monetary policymakers will continue to do their work, as he steered clear of political intrigues when asked about President Donald Trump's call for the central bank to cut interest rates.
"The public should be confident that we will continue to do our work as we always have, focusing on using our tools to achieve our goals, and, really, keeping our heads down and doing our work," Powell said at a press conference after the Federal Open Market Committee decided to keep the federal funds rate unchanged at a range of 4.25% to 4.5% at the end of a two-day meeting.
"I am not going to have any response or comment whatsoever on what the President said," Powell said. "It is not appropriate for me to do so. That is how we best serve the public."
===============
3:17 p.m. in New York
Powell said there's no interest in the FOMC to change the inflation goal of 2%, adding that the level is the global standard.
"I think that goal has served us well over a long period of time," he said. "I think if the Central Bank wanted to look at changing that, you would not do it at a time you are not meeting it. There is no interest at all in changing it if I am being at all unclear. We are not going to change the inflation goal any time soon."
===============
3:11 p.m. in New York
Powell said the FOMC's monetary decisions have a direct impact on the overnight rate, but longer-term rates are beyond the policymakers' control.
"We control overnight rate," Powell said. "Generally it propagates through the whole family of asset prices, including interest rates. In this particular case it happened at a time when, for reasons unrelated to our policy, longer rates have moved up."
================
3:05 p.m. in New York
The Fed isn't in a hurry to cut interest rates after lowering the federal funds rate by 1 percentage point last year, Powell said.
"I think we see it is having meaningful effects in bringing inflation under control," Powell said, referring to the recent cuts. "It has helped bring the labor market into balance, as well."
Still, he acknowledged that the monetary policy remains meaningfully above the neutral rate, adding that "I have no illusion anyone knows precisely what that is."
"It is appropriate we not be in a hurry to make further adjustments," he said
==============
2:53 p.m. New York
Powell said the slowing flow of migrants across the border could be part of the reason unemployment rate has stabilized.
"As population growth slows, the need to make jobs for workers declines, as well," Powell said. "So that seems to be what is happening. You do see a very flat unemployment rate at a time you have seen significant declines" in the number of migrants crossing the border, he said.
================
2:48 p.m. in New York
Powell said the FOMC's policy stance is "well calibrated" to achieve the central bank's dual roles of bringing inflation back to their 2% target and keeping the labor market strong.
"The unemployment rates that been broadly stable," Powell said. "Look at the last couple of inflation readings and you can see we don't overreact to too bad readings, but nonetheless, the last readings have suggested more positive readings, so I think policy is well-positioned."
=============
2:35 p.m. in New York
Powell said resilient consumer spending helped the U.S. economy expand 2% in 2024, while activity in the housing market have stabilized.
"Overall a wide set of indicators suggest conditions in the Labor Market are broadly in balance," Powell said, addressing reporters at the press conference. "The Labor Market is not a source of significant inflationary pressures."
Powell noted that inflation has eased significantly over the past two years, "but remains somewhat elevated relative to our 2% longer-run goal."
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thoughtful Bat_8163
:
It is a dilemma. The numbers are still too hot, which gives FED the “ confidence “ to pause. It is like reducing the pressure of a balloon without popping it. But will FED succeed? Some businesses are suffering from the current high rate and will not survive, such as commercial real estate. It will be a struggling 2025
Christopher Cioc
105486216
:
Why would they do that when the economy, as a whole, (based on job numbers and other indicators) is still doing great? Let's say they cut rates more, borrowing becomes cheaper, people have more money in their pockets and are starting new business and borrowing more. Great right? But all that 'extra' money that people are borrowing starts to cause more demand, people are out buying things right? So demand picks up, and as demand increases so do prices (especially if supply drops due to tariffs), and then we start to deal with rising inflation again. That is exactly why the FED is independent from the government. Presidents want what it's popular and will make people like them, such as interest rates dropping further, while the FED takes a longer approach to the situation.
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105486216 : Trump is right. Interest rates should continue to be cut to further boost the economy & help Americans & businesses on their loans.
thoughtful Bat_8163 : It is a dilemma. The numbers are still too hot, which gives FED the “ confidence “ to pause. It is like reducing the pressure of a balloon without popping it. But will FED succeed? Some businesses are suffering from the current high rate and will not survive, such as commercial real estate. It will be a struggling 2025
Christopher Cioc 105486216 : Why would they do that when the economy, as a whole, (based on job numbers and other indicators) is still doing great? Let's say they cut rates more, borrowing becomes cheaper, people have more money in their pockets and are starting new business and borrowing more. Great right? But all that 'extra' money that people are borrowing starts to cause more demand, people are out buying things right? So demand picks up, and as demand increases so do prices (especially if supply drops due to tariffs), and then we start to deal with rising inflation again.
That is exactly why the FED is independent from the government. Presidents want what it's popular and will make people like them, such as interest rates dropping further, while the FED takes a longer approach to the situation.
thoughtful Bat_8163 Christopher Cioc :![undefined [undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36)