BREAKING: After the FED’s Historic Interest Rate Decision, Chair Jerome Powell Makes Remarks on Live Press Conference

After the Fed’s announcement of a 50 basis point interest rate cut, which surprised Wall Street banks, Fed Chairman Jerome Powell held a press conference and answered questions.

The majority of Wall Street banks had forecast a 25 basis point cut in the interest rate decision.

• Here are the most important sections from Jerome Powell’s statements:
• We focus entirely on our goals.
• The overall economy is strong and we are committed to maintaining strong economic growth.
• The economy is generally strong.
• Our decision today reflects growing confidence that labor market strength can be maintained.
• The labor market has begun to cool from its previously overheated state. We expect GDP growth to remain strong, according to our forecasts.
• The Fed can protect the workforce’s strength with policy adjustments.
• Consumer spending remains resilient.
• The labor market is not the source of high inflationary pressures.
• Although inflation has declined significantly, it continues to remain above our target.
• Longer-term inflation expectations appear well anchored.
• We have not set any fixed interest rate path and will decide at each meeting.
• Taking the balance of risks into account, we reduced interest rates by 50 basis points today.
• Restrictive monetary policy will help restore the balance between supply and demand.
• Policy adjustments can be made more slowly if the economy remains robust and inflation remains stubborn.
• If the labor market worsens, we can respond accordingly. It will be adjusted to achieve good results.
• If the labor market worsens, we can respond accordingly.
• The policies are fully prepared to deal with the risks.
• A lot of data has been announced since the last meeting.
• We believe that a 50 basis point rate cut is the right choice.
• Indicator revisions suggest that employment may be revised downwards.
• We are recalibrating our policy stance.
• There is nothing in our (economic) forecasts that suggests we are in a hurry to act.
• The Fed’s economic forecasts are baseline estimates; any actual actions we take will depend on how the economy develops.
• If appropriate, we may accelerate or slow down the pace of rate cuts or even choose to pause rate cuts.
• A 50 basis point rate cut does not indicate that we are in a hurry to take action.
• It is time to adapt our policies to current economic conditions, depending on inflation and employment market developments.
• Our policy direction is moving towards a neutral stance.
• We will adjust our policy as quickly as we see fit.
• (When asked how close the decision-making process was) We had a full-blown discussion.
• As we enter the blackout period, the scope for rate cuts remains open.
• There was general support for a 50 basis point rate cut today.
• Although there are differences and diverse views, there are also many common points. (When asked about the pace of interest rate cuts) decisions will be made on a case-by-case basis at each meeting and there will be no rush to take action.
• We made a good start today in terms of interest rate cuts.
• I am very pleased with our 50 basis point interest rate cut.
• The 2024 interest rate forecast has changed significantly compared to June.
• We have made a good start in reducing interest rates, which shows the Fed’s confidence that inflation will fall to 2%.
• We think this is the right time (to lower interest rates), but it shows our determination not to be left behind.
• We have been very patient.
• This interest rate cut reflects the FED’s determination not to lag behind the economic situation.
• No one should perceive today’s interest rate cut as a new tempo.
• While other central banks were lowering interest rates, we preferred to wait and see.
• (When asked about the balance sheet) Reserves are stable and ample and are expected to remain so for some time.
• We do not plan to stop reducing our balance sheet in the short term.
• Adjustments in balance sheet and policy rates are both manifestations of (policy) normalization.
• It is clear that labor market conditions have cooled, but current levels are not far from full employment.
• Labor market conditions have cooled across all indicators but are still close to full employment.
• We may be close to achieving our full employment goal.
• We have not seen an increase in unemployment claims or layoffs.
• If the labor market slows down unexpectedly, we can respond in a timely manner.
• We believe there is no need to slow down the labor market further to reduce inflation to 2%.
• The unemployment rate remains at a healthy level.
• The Fed will see two nonfarm payrolls reports before its next meeting.
• (When asked about the US elections) The FED’s decisions are based on serving the American people.
• Our decisions are never about politics or anything else.
• My personal view is that we will not return to negative interest rates on long-term bonds; the neutral rate appears to be higher than before.
• We will gradually reduce interest rates to a more normal level.
• We are not declaring victory on inflation.
• People are not happy about interest rates being raised, but eventually you will see inflation being brought under control.

The Fed has cut interest rates for the first time since the start of the pandemic, lowering borrowing costs by half a percentage point in a move that should provide relief to households and businesses weighed down by higher interest rates. The more aggressive approach suggests authorities are proactively trying to ease pressure on the economy and prevent the labor market from slowing further. The benchmark interest rate is currently hovering between 4.75% and 5%.

The Fed’s September meeting is one of the most eagerly awaited of the year. Inflation has been easing toward normal levels, and Fed leaders expect that to continue, but they are also under pressure to make sure that higher interest rates don’t slow the labor market any further than it already is.

Fed Chair Jerome H. Powell will hold a press conference and announce his diagnosis of the economy.

*This is not investment advice.