Here are the key points from Jerome Powell, Chair of the Federal Reserve, on the current economic outlook and Fed strategy:

🟠The economic environment has changed significantly since 2020

🟠Long-term real rates are notably higher, inflation expectations remain stable

🟠Inflation has fallen from 7.2% to 2.2%, but controlling it remains a key focus

🟠The drop in inflation occurred without a sharp rise in unemployment—a rare historical case

🟠Risks of new and more frequent supply shocks have increased

🟠The era of consistently low interest rates is no longer the base case in the near future

🟠It is important to keep inflation expectations anchored at the 2% target

🟠The Fed’s 2025 strategy review will be completed in the coming months

🟠The wording on employment “shortfalls” will be reconsidered

🟠Fed communication needs to be clearer, especially amid economic uncertainty

🟠Greater transparency is needed to convey the scale of uncertainty in forecasts to the public and markets

🟠Reform of the Fed’s strategic framework will be adapted to new economic conditions

🟠Maintaining transparency and trust in the Fed’s actions remains a priority