Fed President Jerome Powell said they decided that entering a neutral policy stance with an increase in risk of work and no “widespread support” for reducing interest rates by 50 facilities.
The US Federal Bank President Jerome Powell held a press conference after reducing policy benefits to 4-4.25 % by reducing 25 basic points in expectations.
Although the unemployment rate continues to be low, Powell said that increasing jobs has been slowed down and the risk of reducing jobs has increased. Powell says a significant part of increased job decline can reflect the decline in labor increase due to lower migration and lower labor force's participation, but the demand for labor force has weakened and the recent employment rate seems to be below “head -t -head”, necessary to keep unchanged unemployment rates. Powell pointed out that the salary growth continues to slow down, but still in inflation, “in general, it is unusual when going through significant slowing in both supply and demand. In this labor market, less dynamic and weak, the risk of price reduction seems to have increased.” He said. Tariff criticism
Powell said that inflation has accelerated recently and continued to monitor a high number.
Fed President Powell, in the field of service, the shortcoming is continuing, he said. Powell said that short -term inflation expectations have been increased in general because it is reflected in both market -based indicators and surveys in accordance with this year's tariff news. “Consumer spending has a slow down” Powell, the latest indicators show that the growth in economic activity has become moderate, “slow growth reflects the slow down in consumers' spending,” he said. Saying that there are changes in government policies, Powell says their impact on the economy is still uncertain.
“High tariffs begin to attract prices in some goods, but their overall impact on economic activities and inflation is still unclear,” he said. Powell stated that the influence of a reasonable basic scenario on inflation will be relatively short -the one -time price increase will be experienced, but inflation effects are more likely to be permanent and this is a risk that needs to be assessed and managed. “Risk of inflation in a short time” “In the short term, the risk of inflation is increasing, the job risk is decreasing, this is a challenging situation.” He said. Powell said that the risk balance has changed when increasing the risk of reducing work, “in this direction, we decided that one step further towards a more neutral policy stance,” he said. Powell said that the bank continued in a good position to meet the possible economic development with the current decision of the bank. “I do not feel rapid changes in politics”
Powell shows that they can keep monetary policy at a limited level of labor market throughout the year and say that balance the risk of changing from inflation to jobs.
Powell, about a question about the conditions for cutting interest rates over 25 basic points, “today there is no extensive support to reduce the price of 50 basic points,” he said. Reminds that they have made great interest rates and cut off their high interest rates over the past 5 years, Powell said that this was done when the policy needs to be transferred to a new point quickly, but now he does not feel such a situation. Powell, “I think our policy is so accurate. Customs mission, inflation and the labor market, we have made the right decision by waiting and seeing how to develop. Currently, the decline in job creation and other weak signs in the labor market,” he said.