#PowellRemarks **Federal Reserve Chair Jerome Powell’s Recent Remarks Summary**

**Key Highlights (as of latest available data up to October 2023):**

1. **Inflation Outlook**:

- Powell reiterated the Fed’s commitment to bringing inflation down to the 2% target. While progress has been made, he noted that core inflation remains elevated, requiring continued vigilance.

2. **Interest Rates**:

- Emphasized a data-dependent approach to future rate decisions. The Fed left the door open for additional tightening if economic conditions warrant it but signaled cautiousness to avoid overcorrecting.

- Highlighted that rates will likely remain “higher for longer” until inflation shows sustained improvement.

3. **Economic Growth**:

- Acknowledged resilience in the U.S. economy, with strong consumer spending and a robust labor market. However, he warned that tighter financial conditions could slow growth in coming quarters.

4. **Labor Market**:

- Noted that labor demand is gradually cooling but remains tight relative to supply. Wage growth, while moderating, is still above levels consistent with 2% inflation.

5. **Risks and Uncertainties**:

- Cited global geopolitical tensions, energy prices, and lag effects of monetary policy as key risks to the economic outlook.

- Stressed flexibility: “We are prepared to adjust policy as needed.”

6. **Balance Sheet Reduction**:

- Confirmed ongoing quantitative tightening (QT) to reduce the Fed’s bond holdings, but signaled readiness to pivot if market stress emerges.

**Market Implications**:

- Powell’s remarks reinforced a cautious, hawkish pause, with no immediate rate cuts anticipated until inflation data improves decisively. Markets interpreted his tone as balancing optimism about avoiding recession with warnings about persistent inflation.

**Key Quote**:

“We are navigating by the stars under cloudy skies.”