At a press conference on September 18, 2024, U.S. Federal Reserve Chairman Jerome Powell emphasized the Fed's commitment to achieving its dual mandate of maximum employment and price stability. Chairman Powell highlighted the significant progress made by the U.S.
economy, particularly in reducing inflation. Lower inflation has allowed the Federal Open Market Committee (FOMC) to cut interest rates by half a percentage point. Chairman Powell emphasized that the rate cut is consistent with the Fed's long-term goal of steadily reducing inflation to 2% while maintaining the strength of the labor market.
Moving on to the overall economic outlook, Fed Chairman Powell noted that economic activity in the U. S. continues to grow at a solid pace. Chairman Powell noted that U. S. gross domestic product (GDP) grew at a 2.2% annualized rate in the first half of the year, and this growth rate is expected to continue. Chairman Powell attributed this growth to robust consumer spending and a rebound in investment in areas such as equipment and intangibles. Chairman Powell noted that the labor market remains strong, with the unemployment rate at 3.8 percent as of August. He said job growth has slowed from the strong pace seen earlier this year, but remains robust, reflecting a healthy rebalancing of labor supply and demand.
During the press conference, Chairman Powell acknowledged the economic challenges associated with rising interest rates and their impact on businesses and consumers. Chairman Powell noted that monetary tightening has impacted interest rate sensitive sectors such as housing and business investment, with the housing market slowing significantly. However, Chairman Powell reiterated that the Fed should balance its policy to ensure that inflation remains low while minimizing the negative impact on economic growth.
Chairman Powell also discussed the FOMC's views on future monetary policy.
y.
One of the most pressing issues raised by Chairman Powell was the impact of global developments on the U. S. economy.
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