#PowellRemarks

Jerome Powell, Chair of the Federal Reserve, recently shared his insights on the US economy. Here are some key points from his remarks ¹ ²:

- *Economic Progress*: Powell noted that the US economy has made significant progress toward the Fed's dual-mandate goals of maximum employment and stable prices. The labor market remains in solid condition, and inflation has eased substantially from its peak.

- *Inflation Outlook*: Powell believes inflation is on a sustainable path to the Fed's 2% goal. He highlighted that progress on inflation has been broad-based, with estimates indicating total PCE prices rose 2.3% over the 12 months ending in October.

- *Monetary Policy*: The Fed has been reducing policy restraint, and Powell emphasized that the path for getting to a more neutral policy setting is not preset. The committee will carefully assess incoming data, the evolving outlook, and the balance of risks when considering additional adjustments to the target range for the federal funds rate.

- *Tariffs and Inflation Risks*: Powell mentioned that tariffs are highly likely to generate at least a temporary rise in inflation. The Fed will closely monitor the implications of policy changes and aim to keep longer-term inflation expectations well anchored.

- *Economic Uncertainty*: Powell acknowledged that businesses and households are experiencing high uncertainty, which can lead to postponed investment and hiring decisions. He emphasized the importance of keeping inflation expectations anchored to support economic stability.

- *Fed Independence*: Powell stressed that the Fed's independence is crucial for making decisions based on data and analysis, rather than political pressure. He believes the Fed's independence has broad support across both parties in Congress.