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FED Chairman Jerome Powell Speaks After Interest Rate Decision: Here Are the Hot Statements...
On March 19, 2025, following the FED's decision to keep interest rates unchanged, FED Chairman Jerome Powell made striking statements regarding the current economic situation during a press conference. Powell drew attention with his assessments of the economy, inflation, and the labor market. Here are the highlights and details from the meeting...
The Strong Trend in the Economy Continues
Powell emphasized that the US economy is currently performing strongly. However, he noted that there has been a recent slowdown in consumer spending. Powell stated that the FED has decided to slow down the pace of balance sheet reduction for technical reasons, adding that this step is not a signal to the markets.
Inflation is Above Target, Uncertainty is Increasing
Stating that inflation is still above the target level, Powell stated that despite the recent progress, there is an upward trend in short-term indicators. Referring specifically to the impact of tariffs on inflation, Powell said that it is difficult to predict the size of this factor clearly. "Tariffs contribute to inflation, but decomposing this effect with the rise in commodity prices is complicated," he said.
Labor Market Solid, Policy Flexible
Powell, who stated that the labor market has maintained its strength, expressed that the unemployment rate remained within a narrow range last year. Emphasizing that the FED's policies are not tied to a predetermined path, Powell said, "If the economy remains strong, we can sustain restrictive policies, but if the labor market weakens, we can consider easing if necessary."
2025 Interest Rate Expectations Show Diversity
According to the FED's "dot plot" data, there are differing opinions among officials regarding interest rate cuts for 2025. Although Powell did not directly address this issue at the meeting, the released data drew attention: among 19 officials, 4 do not expect an interest rate cut, while 9 anticipate a reduction of 50 basis points (2 times ). No official predicts a cut of 100 basis points or more.
Uncertainty and New Policies on the Table
Powell, drawing attention to the impact of the new government's policy changes on the economic outlook, said, "There is high uncertainty, the main issue is what the net effect will be." He noted that the FED is focused on separating signals from noise in this process and will shape its policies without rushing.
Powell's statements seem to be shaping the expectations of the markets and economists for the upcoming period. The course of inflation and the effects of new policies will play a key role in determining the FED's actions.
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