Fed Chair Jerome Powell delivers the keynote address at the National Association for Business Economics (NABE) conference in Philadelphia.
Here are the highlights from Powell’s speech:
- The future direction of monetary policy will be determined by data and risk assessments.
- Data before the US government shutdown suggested that economic growth could be better than expected.
- Downside risks to the US labor market have increased.
- Our data show that current economic conditions are consistent with those in September.
- There is currently no “risk-free” path for monetary policy.
- Recent data show that the labour market is characterized by low growth and low unemployment.
- Rising risks in the labor market justify a rate cut in September.
- Current data suggest that tariffs are increasing price pressures.
- The Fed has other data besides government sources.
- Stopping balance sheet expansion too early will have little impact.
- Taking away the Fed’s interest-paying authority would make interest rate control very complicated.
- The balance sheet reduction may be nearing completion in the coming months.
- FED officials will discuss the structure of the balance sheet.
- Taking away the Fed’s interest-paying authority would make interest rate control very complicated.
- The balance sheet reduction may be nearing completion in the coming months.
- FED officials will discuss the structure of the balance sheet.
- The Fed remains committed to maintaining a balance sheet that includes only Treasurys for an extended period.
- The Fed’s existing policy tools are working well.
- We are seeing signs of tightening in some areas of the money market.
- The claim that reserve interest is a burden on taxpayers is “not true.”
- The increase in commodity prices reflects tariffs rather than general inflationary pressures.
- The risk of slow transfer of customs duties is beginning to emerge as persistent inflation.
You can access the current version of Powell’s speech by refreshing the page.
Markets are waiting for Powell’s comments to provide clues about the direction of interest rates for the rest of the year and into 2026.
This speech is particularly important because it will be Powell’s last official statement before the Federal Open Market Committee (FOMC) meeting in two weeks.
In recent speeches, Powell has highlighted the risky balance between the Fed’s two primary goals: full employment and low inflation. He noted that the unemployment rate remains low, but that the current rate of job growth may be insufficient to keep unemployment stable.
On the inflation front, Powell said the rate is running above the Fed’s 2 percent target, but they expect it to decline after a temporary increase caused by tariffs.
*This is not investment advice.
