Fed Powell is giving his opening remarks and says:
- Purchase of shorter-term securities to support effective control of policy rates.
- Consumer spending solid, business fixed investment expanding.
- Housing sector remains week
- effects of the shutdown should be offset by higher growth next quarter from reopening. Layoffs, hiring remain low
- September labor market releases showed unemployment rate edged up, job gains slowed significantly.
- Labor demand has cleared softened.
- Less dynamic, somewhat softer labor market.
- Downside risks and labor market.
- Inflation remained somewhat elevated.
- Little data on inflation have been released since October meeting.
- Readings on inflation are higher as goods inflation has picked up.
- Disinflation continued for services.
- Near-term risk to inflation tilted upside, to employment to the downside.
- There is no risk-free policy path.
- With downside risk to employment having risen, balance of risks shifted.
- Well positioned to determine adjustment to policy rate
- further normalization of last 3 meetings should help stabilize labor market, key pressure down on inflation.
- Policymaker projections are subject to uncertainty, not a plan or decision.
- No preset by meeting basis.
- Rates are now in a plausible range of neutral.
- Committee judges reserve balances have declined to ample levels
Q&A
- The “extent and timing phrase” points out we’ll carefully evaluate incoming data.
- Well positioned to wait to see how economy evolves.
- Consumer spending has been resilient, spending on AI data centers has held up business
- fiscal policy will be supportive.
- Baseline is for solid growth next year.
- AI spending continues
Market reaction at 2:42 PM ET
US stocks have seen some rotation to the downside with the NASDAQ down -0.31%. The S&P is still up 0.15% and the Dow is up 0.61%. The market is reacting somewhat negatively to the comment that rates are now in a plausible neutral range
Fed Powell:Layoffs, hiring remain low. Rates are now in a plausible range of neutral.
