#PowellRemarks Federal Reserve Chairman Jerome Powell recently delivered remarks at the Economic Club of Chicago, providing insights into the current economic outlook and monetary policy. Here are the key points ¹ ²:

- *Economic Outlook*: Powell stated that despite heightened uncertainty and downside risks, the US economy is in a solid position. The labor market is at or near maximum employment, and inflation has eased from its pandemic highs but remains above the 2% objective.

- *Inflation Concerns*: Powell emphasized that tariffs could lead to higher inflation and slower growth. He noted that the Fed's role is to ensure that tariffs cause only a one-time price increase and not an ongoing inflation problem.

- *Monetary Policy*: Powell advocated for a measured approach, suggesting that the Fed will wait for greater clarity before considering any adjustments to the policy stance. He emphasized the importance of keeping longer-term inflation expectations well anchored.

- *Dual Mandate*: Powell highlighted the potential tension between the Fed's dual-mandate goals of maximum employment and price stability. He stated that the Fed will balance these goals, considering the potentially different time horizons over which respective gaps would be anticipated to close.

Some notable perspectives from other Fed officials include ²:

- *Fed Governor Christopher Waller's View*: Waller suggested that if the tariff-induced slowdown is significant and threatens a recession, he would favor cutting interest rates sooner and faster than previously thought.

- *Implications for Housing*: The remarks caused mortgage rates to fall, with the 30-year fixed rate decreasing to 6.81%. Powell's speech has sparked discussion about the potential for a collision course between the Fed and the administration on economic policy.