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Fed's Powell Says There's No Hurry to Cut Interest Rates

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Bloomberg Nov 14 21:54 · 12.6k Views

Federal Reserve Chair Jerome Powell says inflation is moving on a "sometimes-bumpy" path toward 2%.

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Transcript

  • 00:00 Turning to inflation,
  • 00:02 the labor market has cooled to the point where it is no longer a source of a significant inflationary pressures.
  • 00:08 This cooling and the substantial improvement in broader supply conditions
  • 00:12 have brought inflation down significantly over the past two years
  • 00:16 from its mid 2022 peak above 7%.
  • 00:21 Progress on inflation has been broad.
  • 00:22 Based
  • 00:24 estimates based on the Consumer Price Index and other data released this week indicate
  • 00:29 that total PCE prices rose 2.3%
  • 00:32 over the 12 months ending in October
  • 00:35 and that excluding the volatile food and energy categories,
  • 00:38 core PCE prices rose 2.8%.
  • 00:44 Core measures of goods and services inflation, excluding housing, fell rapidly over the past two years and have returned to rates
  • 00:51 closer to those consistent with our goals.
  • 00:53 We expect that these rates will continue to fluctuate in the recent ranges
  • 00:57 and we're watching carefully to be sure that they do.
  • 01:00 However,
  • 01:01 just as we are closely tracking the gradual decline in housing services inflation,
  • 01:05 which has yet to fully normalize,
  • 01:09 inflation is running much closer to our 2% goal, but it's not there yet
  • 01:13 and we are committed to finishing the job.
  • 01:17 With labor market conditions in rough balance and inflation expectations well anchored, I expect inflation to continue to come down toward our 2% objective,
  • 01:25 albeit on a sometimes bumpy path.
  • 01:30 Given progress toward our inflation goal in the cooling of Labor market conditions, last week, my Federal Open Market Committee colleagues
  • 01:37 and I took another step in reducing the degree of policy restraint
  • 01:41 by lowering our policy interest rate by 1/4 percentage point.
  • 01:45 We're confident that with an appropriate recalibration of our policy stance,
  • 01:49 strengthen the economy and the labor market can be maintained with inflation moving sustainably down to 2%.
  • 01:56 We see the risks to achieving our employment and inflation goals as being roughly in balance,
  • 02:01 and we are attentive to the risks
  • 02:03 to both sides.
  • 02:05 We know that reducing policy restraint too quickly
  • 02:08 could hinder progress on inflation.
  • 02:11 At the same time, reducing policy restraint too slowly
  • 02:14 could unduly weaken economic activity and employment.
  • 02:18 We're moving policy over time to a more normal setting,
  • 02:21 but the path for getting there
  • 02:23 is not preset
  • 02:25 and considering additional adjustments to the target range for the federal funds rate.
  • 02:29 We will carefully assess incoming data,
  • 02:31 the evolving outlook and the balance of risks.
  • 02:35 The economy is not sending any signals that we need to be in a hurry to lower rates.