Fed's Powell: US economy is solid
Federal Reserve's Chair Jerome Powell discussed the US economic outlook at the Economic Club of Chicago. Key QuotesWell positioned to wait for greater clarity before considering any changes to policy stance. US economy 'solid' despite heightened uncertainty, downside risks. At or near maximum employment, inflation a bit above 2% goal, has come down a great deal. Growth likely slowed in first quarter of 2025 from last year's solid pace. Strong first quarter imports to weigh on GDP growth. Sharp decline in business, household sentiment and elevated uncertainty, reflecting trade policy concerns. Labour market solid, broadly in balance, not contributing to inflation. PCE prices likely rose 2.3% in 12 months through march, core PCE estimated at 2.6%. Administration's policies still evolving, effects remain highly uncertain. So far larger-than-expected tariffs likely mean higher inflation, slower growth. Inflationary effects of tariffs could be more persistent, depends ultimately on inflation expectations. Our obligation is to keep longer-term inflation expectations well- anchored.
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