FED Press Conference Highlights

After the FED keeps interest rates steady, FED Chairman Jerome Powell holds an important press conference.

Highlights from the live broadcast:

• The economy is strong.
• The FED made a technical decision to slow down the pace of balance sheet reduction.
• Surveys show increasing economic uncertainty.
• Labor market conditions are solid.
• Inflation is still a bit high.
• Time will tell how the uncertainty will affect the economic outlook.
• The unemployment rate was in a narrow range last year.
• Recent signs suggest consumer spending is slowing.
• Inflation has improved but remains above target.
• Surveys show tariffs drive inflation expectations.
• Some short-term inflation indicators are trending upward.
• There is a high level of uncertainty about new policies and their impact.
• There is no need for the Fed to rush to change its policy stance.
• We must focus on separating signals from noise.
• The new government is implementing significant policy changes, and the key is net impact.
• If the economy remains strong, we can maintain policy restraint for longer.
• If the labor market is weak, we can ease policy if necessary.
• We have seen some signs of increased tightening in the money market.
• Politics does not follow a predetermined path.
• The framework review currently focuses on labor market dynamics and full employment targets.

FED’s Dot Plot on Interest Rates for 2025:
– Among the 19 authorities:
– 4 say no interest rate cuts in 2025 (1 in December).
– 4 say cumulative cut will be 25 basis points (1 cut, 3 in December).
– 9 believe cumulative cut should be 50 basis points (2 cuts, 10 in December).
– 2 believe cumulative cut should be 75 basis points (3 cuts, 3 in December).
– No official believes in 100 or 125 basis points cuts (1 in December).

This is not investment advice.