#PowellRemarks

Jerome Powell, Chair of the Federal Reserve, recently shared his insights on the US economy. Here are some key points from his remarks:

Economic Outlook

- *Growth*: The US economy grew 2.4% in 2024, with the labor market remaining in solid condition.

- *Inflation*: Inflation has eased substantially from its peak, and the Fed believes it's on a sustainable path to the 2% goal.

- *Interest Rates*: The Fed has taken steps to reduce policy restraint, lowering the policy interest rate by 1/4 percentage point.

Monetary Policy

- *Dual Mandate*: The Fed remains committed to its dual mandate of maximum employment and price stability.

- *Rate Cuts*: The path for future rate cuts will depend on incoming data and the economic outlook.

- *Neutral Policy*: The Fed is moving policy to a more neutral setting, but the path isn't preset.

Challenges and Uncertainty

- *Tariffs and Inflation*: Tariffs are likely to generate temporary inflationary pressures, and the Fed will focus on keeping longer-term inflation expectations anchored.

- *Economic Uncertainty*: Businesses and households are experiencing high uncertainty, which can impact investment and economic growth.

- *Financial Stability*: The banking system is well-capitalized and resilient, but the Fed is monitoring commercial real estate loans and private credit growth closely.

Key Takeaways

- The Fed is carefully assessing incoming data and the economic outlook to make informed decisions.

- The goal is to maintain economic strength and labor market stability while bringing inflation sustainably down to 2%.

- The path forward will depend on evolving economic conditions and the balance of risk.