In a speech released today at the US Monetary Policy Forum in New York City, Federal Reserve Chairman Jerome Powell highlighted the central bank’s careful approach amid widespread economic uncertainty.
Powell repeatedly prepared the Federal Reserve to maintain current interest rates and adopted a “watch-and-see” stance to monitor the impact of recent policy changes and the economic indicators.
“We don’t have to hurry, and we’re in a position enough to wait to be clearer,” he said.
Powell highlighted the robustness of the US labor market, saying employers added 151,000 jobs in February, bringing an average monthly employment increase of 191,000 since September.
The unemployment rate rose just to 4.1%, remaining within a narrow range of 3.9% to 4.2% over the past year.
Destruction: Fed’s Powell: The economy is fine. There’s no need to do anything.
– anual_whales (@unusual_whales) March 7, 2025
He observed that wage growth was eased to a more sustainable pace, adjusting labor demand and demand, thereby reducing inflationary pressure from the labour market.
“The labour market is not a critical source of inflationary pressure as wage growth and labor demand has shifted to a better balance,” he said.
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Inflation trends
Addressing inflation, Powell noted that as of January there had been a significant decline of over 7% and above 2.5% from its mid-2022 peak. He warned that recent measurements are somewhat above the 2% objectives of the Federal Reserve.
“The path to bringing inflation back sustainable to targets is bumpy and we expect it to continue,” Powell said.
He emphasized the importance of not overreacting short-term fluctuations, and reiterated the central bank’s commitment to closely monitor inflation trends and align with long-term goals.
“Inflation can be volatile each month and will not overreact to one or one or less measurements higher or lower than expected,” he said.
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Trade policy and financial outlook
Powell touched on recent trade policies, including announcements from the Trump administration and delays on sudden import duties affecting trading partners such as Mexico, Canada and China.
These policy changes contribute to market volatility and complicate the economic outlook. Powell emphasized the need to clarify in these areas before adjusting monetary policy, saying that central banks are well placed to make their economic outlook more clear.
Given these factors, Powell has shown that the Federal Reserve is likely not changing its key interest rates in the coming months. The central bank previously maintained this policy in January by reducing its benchmark interest rate by 100 basis points in the second half of 2024 to the 4.25% range.
Cryptographic reaction
Crypto responded to Powell’s comments with careful optimism. While investors appear to be relieved by the Federal Reserve patient approach, concerns about potential stagflation and Trump’s ongoing crypto summit continue.
Bitcoin is currently trading at $88,300.
