6
FED Chairman Jerome Powell made interesting statements about the US economy in his speech at the Chicago Economic Club, which was held as planned today.
Here’s what Powell said:
- Current policy is well placed and we will await clearer economic data before considering changing the policy stance.
- Despite heightened uncertainty and ongoing downside risks, the U.S. economy remains “strong.”
- Employment is now near its highest level, inflation is just above the 2% target, and inflation has fallen significantly.
- Economic growth in the first quarter of 2025 may slow compared to stable growth last year.
- Strong imports in the first quarter will drag down GDP growth.
- Business and household confidence fell sharply and uncertainty increased, reflecting concerns about trade policy.
- The labor market is robust and broadly balanced, and there is currently no pressure on inflation.
- Personal consumption expenditures (PCE) are expected to grow by 2.3% and core PCE by 2.6% in the 12 months ending in March.
- Government policies are still being adjusted and the associated impacts remain highly uncertain.
- The tariffs, which are much higher than expected so far, could mean higher inflation and slower economic growth.
- The inflationary impact of tariffs may be more persistent and ultimately depends on market inflation expectations.
- Our responsibility is to keep long-term inflation expectations intact.
- We may face a difficult situation where there is a conflict between two goals. In such a case, we will assess how far the economy is from our various goals and the potential timeframe for closing these gaps.
(Explanations will be updated as they are added.)
*This is not investment advice.