After the Fed stabilizes interest rates, Fed Chairman Jerome Powell will hold an important press conference.
Here are all the highlights of Powell’s live broadcast:
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- The economy is strong.
- The Fed has made a technical decision to slow the pace of balance sheet reductions.
- The research shows an increase in economic uncertainty.
- The labor market situation is solid.
- Inflation is still a little high.
- Time shows how uncertainty affects the economic outlook.
- The unemployment rate was in a narrow range last year.
- Recent signs suggest that consumer spending is slowing.
- Inflation has improved, but it has exceeded its target.
- According to research, tariffs promote inflation expectations.
- Some short-term inflation indicators are heading upwards.
- There is a high level of uncertainty about the new policy and its impact.
- The Fed does not need to rush to change its policy stance.
- The focus should be on isolating the signal from the noise.
- The new government is implementing important policy changes, and the key is net impact.
- If the economy remains strong, policy constraints can be maintained for longer.
- If the labor market is weak, policies can be relaxed if necessary.
- There have been some signs of increased tightening in the money market.
- Politics does not follow the prescribed path.
- Currently, the framework review focuses on labor market dynamics and full employment goals.
However, according to the Fed’s DOT plot released in the interest rate decision:
- Of the 19 authorities, four said there would be no interest rate cuts in 2025 (December 1).
- Four authorities said the cumulative interest rate cuts in 2025 would be 25 basis points.
- 9 Officials believe that the cumulative interest rate reduction in 2025 will be 50 basis points.
- Two staff believe that the cumulative interest rate reduction in 2025 will be 75 basis points, or three interest rate reductions (three in December).
- We do not believe that the 2025 cumulative rate reduction should be 100 basis points (1 December), so we do not think that the 2025 cumulative rate reduction should be 125 basis points (1 December).
*This is not investment advice.
