As Federal Reserve Chair, Jerome Powell is delivering his final remarks today following the central bank’s latest decision to leave interest rates unchanged. The speech began as this report was being prepared, and the market is closely watching the important messages Powell will convey after the Fed’s rate pause.
Key themes in Powell’s remarks
This decision marks a shift in the Fed’s language, now clearly describing inflation as “high,” referencing the acceleration in consumer price inflation driven by rising energy costs. Member Miran cast a vote for a rate cut, while the Fed started factoring in rising geopolitical tensions with Iran. The vote saw the largest dissent since 1992, with the policy of steady rates passing by an 8 to 4 margin.
Initial reactions and notable comments
What is Powell saying so far? As his speech continues, major points are being updated in real time. The following capsule highlights reflect the key statements made by Powell during his press conference.
Powell began his address by stressing the uncertainty arising from recent developments in the Middle East. He stated that risks are affecting the Fed’s mandate across multiple dimensions, urging careful attention to incoming data. Powell also observed that consumer spending remains resilient in the face of ongoing economic challenges.
Despite strong consumption, Powell noted signs of weakening labor demand. He explained that the slowdown in job gains mirrors a broader decline in workforce growth, and that current labor demand has visibly softened.
Regarding the employment outlook, Powell commented that the unemployment rate has barely changed, indicating stability in the job market despite recent challenges. These factors continue to influence the Fed’s approach to monetary policy.
Turning to price pressures, Powell highlighted that the Fed expects March’s Personal Consumption Expenditures (PCE) inflation to hit 3.5 percent, while core PCE—which excludes food and energy—is anticipated to come in at 3.2 percent. He acknowledged the uptick in near-term inflation projections.
Nevertheless, Powell pointed out that long-term inflation expectations remain aligned with the Fed’s 2 percent target, reflecting confidence in eventual price stability despite current headwinds.
The overall economic outlook remains highly uncertain, Powell conceded, citing factors such as volatile energy costs that are likely to push up short-term inflation. This uncertainty has prompted the Fed to refrain from committing to a fixed policy path.
Powell also emphasized that monetary policy is not on a predetermined course, reinforcing the data-driven nature of the central bank’s strategies as new developments emerge.
During his remarks, Powell confirmed that this is his final press conference as chair. He assured the public that the Fed’s decisions reflect collective consensus and described the central bank’s position as fundamentally solid.
He also addressed ongoing questions regarding his leadership, stating that the investigation into his conduct has concluded and that he will remain in his role until a successor is named.
