BREAKING: FED Chairman Jerome Powell Makes Hot Remarks – LIVE

FED Chairman Jerome Powell is speaking at a hearing of the Senate Finance, Housing and Urban Affairs Committee, here are the highlights from his speech:

• Long-term inflation expectations appear robust.
• The FED’s framework review will not focus on the inflation target and the inflation target will remain at 2%.
• Existing policies are fully prepared to deal with risks and uncertainties.
• If the economy remains strong and inflation does not approach 2%, policy could be maintained cautiously for an extended period. If the labor market weakens unexpectedly or inflation falls more than expected, policy could be eased modestly.
• Overall, the US economy is strong and the inflation rate is close to the 2% target, but we are still a bit high.
• The unemployment rate remains low and stable, the labor market is strong and has not become a source of inflationary pressure.
• Although inflation has approached our long-term target of 2%, it is still somewhat high.
• Recent indicators show that economic activity continues to expand steadily.
• Activity in the housing sector appears to have stabilized.
• We remain focused on achieving our dual mandate goals of maximum employment and stable prices.
• Labor market conditions have moved away from previous overheating and remain strong.
• The labor market appears to be stabilizing. The unemployment rate has remained stable since the middle of last year and remains low.
• Nominal wage growth has slowed over the past year, and a wide range of indicators suggest that labor market conditions remain roughly stable.
• The labor market is not a significant source of inflationary pressure. Strong labor market conditions in recent years have helped narrow long-standing gaps in employment and income between different population groups.
• Inflation has fallen significantly over the past two years, but personal consumption expenditures inflation is still running slightly above our long-term target of 2%.
• Over the longer term, inflation expectations appear well anchored, as reflected by a wide range of surveys of households, businesses and forecasters, as well as indicators from financial markets.
• We continue to reduce our securities holdings.
• Given that our current policy stance is significantly less tight than prior levels and the economy remains strong, we do not need to rush to change our policy stance.
• The Federal Open Market Committee will consider incoming data, the evolving outlook, and the balance of risks in considering the extent and timing of further adjustments to the target range of the federal funds rate.
• Powell testified before the Senate Finance, Housing and Urban Affairs Committee to present the central bank’s semiannual Monetary Policy Report to Congress. In his remarks, Powell emphasized the Fed’s commitment to achieving its dual mission of maximum employment and stable prices, while emphasizing the economic progress and ongoing challenges.
• Powell noted that the U.S. economy remains strong in 2024, with gross domestic product (GDP) expanding by 2.5%, driven by resilient consumer spending. Investment in equipment and intangible assets declined in the fourth quarter, while overall investment remained solid throughout the year. The housing market, which faced challenges in mid-2023, has since stabilized.
• He said labor market conditions have cooled from overheating but remain strong. Payrolls have increased by an average of 189,000 jobs per month over the past four months, while the unemployment rate has held steady at 4%. Wage growth has moderated and the employment-labor gap has narrowed, reducing inflationary pressures. Powell noted that the labor market is generally in balance and is not contributing to significant inflationary concerns.
• Inflation has moderated significantly over the past two years but remains above the Fed’s 2% target. The personal consumption expenditures (PCE) price index rose 2.6% in the 12 months ending in December, while core PCE, which excludes food and energy, rose 2.8% in the same period.
• Powell noted that long-term inflation expectations remain robust, as shown by surveys of households, businesses and financial market indicators.
• The Federal Open Market Committee (FOMC) has responded to these economic changes by adjusting its policy stance. Since September, the Fed has cut interest rates by a full percentage point from its peak after 14 months of holding the federal funds rate between 5.25% and 5.5%.
• Powell described this readjustment as necessary given the progress made in controlling inflation and cooling labor market conditions.
• “Our policy stance is significantly less restrictive than it currently is, and with the economy remaining strong, there is no need to rush to adjust our policy stance,” Powell said, warning that easing monetary policy too quickly could undermine progress on inflation, while moving too slowly could stifle economic growth and employment.
• Looking ahead, Powell said the Fed will continue to evaluate incoming data and economic risks before making further policy adjustments. If inflation remains high, the Fed could keep restrictive policies in place for longer.
• Conversely, if economic growth weakens unexpectedly, the central bank is prepared to ease policy accordingly.
• Powell also announced a periodic review of the Fed’s monetary policy framework, including an assessment of its strategy, tools, and communication practices.
• The review, which includes outreach through events such as Fed Listens and a research conference in May, is expected to be completed by the end of the summer. The 2% inflation target will remain unchanged as part of the review.
• The risk outlook regarding budget deficits and inflation expectations is one of the main factors in the rise of long-term interest rates.
• Long-term interest rates are determined by supply and demand in the bond market.
• By law, the President cannot remove members of the Fed’s board of directors.
• It is not possible to give an exact figure, there is still a long way to go.
• It is not yet clear which tariff policies will be implemented and their specific impact is still unknown.

*This is not investment advice.