FED PRESS CONFERENCE – CLOSING REMARKS: EMPLOYMENT, RATE OUTLOOK & INFLATION
1. Labor Market: Not as Weak as Feared
Chair Jerome Powell rejected the notion that the labor market is “clearly weakening.”
• Unemployment remains low at 4.2%, in line with long-term natural levels.
• Job growth has slowed, but so has labor supply, keeping the market balanced.
• Real wages continue to rise at a healthy pace, consistent with the 2% inflation goal.
However, Powell warned of a “fragile equilibrium”: low layoffs but few new jobs. If layoffs rise without job-finding improving, unemployment could spike — something the Fed is watching closely.
2. 2025 Rate Projections
When asked why no FOMC members projected a rate hike or hold in 2025 despite inflation being forecasted at 3%, Powell explained:
• Members report the most likely scenario, not all possibilities.
• Given the high uncertainty, no one is fully confident in their forecast.
• A rate hike is not the base case, but remains a possibility if conditions shift significantly.
3. Powell’s Closing Statement
Powell ended by emphasizing that the U.S. economy has remained resilient, despite repeated forecasts of a downturn over the past three years. He concluded:
“We are watching the data very closely. Our current policy stance is well-positioned to respond if needed.”
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