Fed President Jerome Powell issued an interesting statement about the US economy in a speech at the Chicago Economic Club, which was held today as planned.
Here’s what Powell said:
- The current policy is well placed and we will wait for clearer economic data before considering changes to our policy stance.
- Despite growing uncertainty and continued negative risks, the US economy remains “strong.”
- Currently, employment is approaching its highest level, with inflation slightly above its 2% target and inflation has dropped significantly.
- Economic growth in the first quarter of 2025 may be slower compared to last year’s stable growth.
- Strong first quarter imports will reduce GDP growth.
- Reflecting concerns about trade policy, business and household trust has declined sharply, increasing uncertainty.
- The labour market is robust and broadly balanced, and inflation is currently under pressure.
- Personal Consumption Expenses (PCE) is expected to increase by 2.3% and core PCE by 2.6% over the 12 months of March.
- Government policies are still coordinated and the associated impact remains very uncertain.
- Tariffs that are far higher than ever expected could mean higher inflation and slower economic growth.
- The impact of tariff inflation is more sustainable and may ultimately depend on market inflation expectations.
- Our responsibility is to keep long-term inflation expectations intact.
- You can face difficult situations where there is conflict between two goals. In such cases, we assess how far the economy is from our various goals and the potential time frame to close these gaps.
(This will be updated when a description is added.)
*This is not investment advice.
