In prepared remarks, Fed Chair Barkin said his baseline outlook for 2025 is positive: "I expect more upside than downside to economic growth." He added that expectations for economic expansion may be behind the recent pick-up in business optimism. Part of his optimism about the economic outlook is that he believes the momentum in consumer spending could keep the economy growing at a healthy pace in the coming months. "With business optimism high and the labor supply unlikely to continue to grow so strongly, the current labor market balance is more likely to move in the direction of hiring rather than layoffs," Barkin said. He also predicted that the more cost-conscious consumers that have emerged in recent months will put pressure on businesses to limit price increases, which should continue to keep inflation down. But he also noted that inflation has not yet returned to the Fed's 2% target: "We have more work to do, but we don't think we need to be as restrictive as we were before to get the job done." (Jin Shi)

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