What Chairman Jerome Powell will say at the press conference after the FED cut interest rates by 25 basis points as expected is of great importance.
The dot plot graph and statements published by the FED along with its interest rate decision were evaluated in favor of the hawkish.
Here's what Powell said at the live press conference (refresh the page for new statements):
- Overall economic performance is strong.
- The job market has cooled due to overheating.
- Inflation is closer to the 2% target.
- Consumer spending remains resilient.
- Economic activities continue to expand steadily.
- The labor market remains robust.
- Although the unemployment rate has risen, it remains at a low level.
- Wage growth is slowing.
- Current labor market conditions are looser compared to 2019.
- The labor market is not a significant source of inflationary pressure.
- Long-term inflation expectations appear robust.
- The risks to achieving the objectives are roughly balanced.
- The interest rate range was lowered today and is moving towards a more neutral level.
- Today, the policy stance is significantly less restrictive.
- We may be more cautious in considering further interest rate adjustments.
- The Fed does not follow a predetermined path for interest rates.
- Reducing policy restrictions too slowly could severely weaken the economy and employment.
- If inflation cannot move sustainably towards 2%, policy restrictions can be lifted more slowly.
- Today's interest rate decision was a difficult one.
- We believe that inflation is still developing more or less as expected.
- The inclusion of the phrase “magnitude and timing” in the statement regarding interest rate adjustments suggests that we are at or close to a time when we will slow down interest rate cuts.
- We are clearly closer to a neutral interest rate.
- The slowdown in the pace of rate cuts reflects stronger economic data this year.
- We believe the policy remains largely restrictive.
- As long as the labor market and economy remain robust, further rate cuts may be considered cautious.
- We believe that inflation risks and uncertainties are high.
- The decision to cut interest rates next year will be based on data.
- Economic growth will be faster than expected in the second half of 2024.
- The fact that it is close to a neutral interest rate is another reason to be cautious.
- Inflation returned to normal in November after rising.
- We pay attention to the development of inflation when evaluating interest rate cuts.
- We hope to see further progress on inflation and a robust labor market.
- The committee discusses how tariffs drive inflation, and we have done a lot of work on that.
- A core inflation rate of 2.5% in 2025 would be significant progress.
- We will wait for further progress on inflation before considering reducing interest rates.
- The scope and timing of future rate cuts are not decisions we make.
- We expect significant policy changes and we need to see what they are and their impact to get a clearer picture.
- We have made significant progress in bringing inflation under control.
- It may take another year or two to reach the 2% inflation target.
- We must continue to implement restrictive policies to achieve 2% inflation.
- We are in a new phase of the interest rate regulation process.
- A rate hike next year is unlikely. We cannot rule out any possibility.
Investors had largely expected the Federal Reserve to cut interest rates, but officials signaled some skepticism about how much and how quickly the central bank will cut rates in the future.
“What really drives long-term interest rates and the market is the expectations for a rate cut,” said Jay Hatfield, CEO of Infrastructure Capital Advisors.
Analysts say that's consistent with the possibility that the Fed could pause interest rate cuts in January, if not longer, while central bankers assess the economy and the impact of new policies the new president will implement.
*This is not investment advice.
