Fed's Powell: Longer term inflation expectations appear well anchored

post: POWELL: ECONOMY IS STRONG OVERALL post: FED'S POWELL: THE LABOR MARKET HAS COOLED FROM FORMERLY OVERHEATED STATE. post: Fed’s Powell: Decision Reflects Growing Confidence Strength In Labor Market Can Be Maintained - Consumer Spending Has Remained Resilient, Labor Market Continued To Cool - Improving Supply Conditions Have Supported Demand Over Past Year - Projections Show We Expect GDP Growth To… post: FED'S POWELL: THE LABOR MARKET NOT A SOURCE OF ELEVATED INFLATIONARY PRESSURES. post: POWELL: INDICATORS SUGGEST LABOR MARKET IS NOW LESS TIGHT THAN JUST BEFORE PANDEMIC

In conjunction with the Federal Open Market Committee (FOMC) meeting held on September 17–18, 2024, meeting participants submitted their projections of the most likely outcomes for real gross domestic product (GDP) growth, the unemployment rate, and inflation for each year from 2024 to 2027 and over the longer run. Each participant’s projections were based on information available at the time of the meeting, together with her or his assessment of appropriate monetary policy—including a path for the federal funds rate and its longer-run value—and assumptions about other factors likely to affect economic outcomes. The longer-run projections represent each participant’s assessment of the value to which each variable would be expected to converge, over time, under appropriate monetary policy and in the absence of further shocks to the economy. “Appropriate monetary policy” is defined as the future path of policy that each participant deems most likely to foster outcomes for economic activity and inflation that best satisfy his or her individual interpretation of the statutory mandate to promote maximum employment and price stability. post: *FED’S MEDIAN RATE FORECAST END-’24 AT 4.4%; PREV. 5.1% *FED’S MEDIAN RATE FORECAST END-’25 AT 3.4%; PREV. 4.1% *FED’S MEDIAN RATE FORECAST END-’26 AT 2.9%; PREV. 3.1% *FED’S MEDIAN RATE FORECAST END-’27 AT 2.9% *FED’S MEDIAN RATE FORECAST LONGER-RUN AT 2.9%; PREV. 2.8% post: FED PROJECTIONS IMPLY 50 BPS OF ADDITIONAL RATE CUTS IN 2024 FROM CURRENT LEVEL, 100 BPS MORE IN 2025 AND ANOTHER 50 BPS IN 2026 post: FOMC DOT PLOT pic.twitter.com/OFT4mrVis6

post: FED'S POWELL: IF THE ECONOMY REMAINS SOLID AND INFLATION PERSISTS, WE CAN DIAL BACK POLICY MORE SLOWLY. post: FED'S POWELL: IF THE LABOR MARKET DETERIORATES WE CAN RESPOND. post: POWELL: ASKED ABOUT 50 BPS CUT, SAYS SINCE LAST MEETING THERE'S BEEN A LOT OF DATA INCLUDING DURING BLACKOUT POWELL: BENCHMARK REVISIONS SHOWED PAYROLLS MAY BE REVISED DOWN POWELL: WE CONCLUDED THAT 50 BPS CUT WAS THE RIGHT THING POWELL: WE WILL MAKE FUTURE DECISIONS BASED… post: POWELL: NOTHING IN OUR PROJECTIONS THAT SUGGEST WE ARE IN A RUSH post: FED'S POWELL: WE LEFT OPEN THE SIZE OF RATE CUT GOING INTO BLACKOUT.

post: FED'S POWELL: THERE WAS BROAD SUPPORT FOR A 50 BPS CUT TODAY. post: POWELL: WE DON'T THINK WE ARE BEHIND THE CURVE post: POWELL: NO ONE SHOULD LOOK AT TODAY AND THINK THIS IS THE NEW PACE post: FED'S POWELL: WE ARE NOT THINKING ABOUT STOPPING RUNOFF BECAUSE OF THIS AT ALL. post: FED'S POWELL: CLEARLY LABOR MARKET CONDITIONS HAVE COOLED, BUT LEVEL OF CONDITIONS IS PRETTY CLOSE TO MAX EMPLOYMENT.

post: FED'S POWELL: RETAIL SALES AND Q2 GDP INDICATE AN ECONOMY GROWING AT A SOLID PACE, WHICH WILL ALSO SUPPORT LABOR MARKET. post: FED'S POWELL: WE DON'T NEED TO SEE FURTHER LOOSENING OF LABOR MARKET TO GET INFLATION DOWN TO 2%. post: POWELL: IMMIGRATION IS ONE OF THE THINGS THAT HAS ALLOWED UNEMPLOYMENT RATE TO RISE post: Powell: "It feels to me the neutral rate is probably significantly higher than it was back then" [before the pandemic]. post: FED'S POWELL: WE ARE NOT DECLARING VICTORY ON INFLATION.