Key points from Fed Chairman Powell's speech after the decision to cut the interest rate by 0.25 percentage points. Not much new, but at the end - one alarming thesis for the markets:
- Inflation has fallen significantly.
- The Fed has taken another step towards easing its restrictive policy.
- I remain confident that inflation will steadily decline to 2%.
- Core inflation remains high.
- Consumer spending growth remains robust.
- The labor market remains stable.
- Labor market conditions are now less tense than before the pandemic.
- Wage growth has slowed.
- The labor market is not a source of inflationary pressure.
- The risks to the Fed's dual mandate (labor market and inflation) are balanced.
- The economy is strong.
- The rate cut will help maintain the strength of the economy.
- Improving supply conditions have supported the economy.
- The nonfarm payrolls report would have been better if not for the hurricanes and strikes.
❗️- If the economy remains strong and inflation does not reach 2%, we will be able to more slowly wind down the restrictive policy.
- In the near term, the elections will not affect the Fed's policy.