Fed Chair Powell Says Progress Towards Lowering Inflation 'Is Probably Delayed For The Time Being'

2 days ago

During a press briefing on Wednesday, Federal Reserve Chair Jerome Powell spoke about the Federal Reserve's higher inflation forecast.

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Transcript

00:00Nick Timoros, The Wall Street Journal.

00:07Chair Powell, Chair Greenspan wants to find price stability as an environment in which

00:11inflation is so low and stable over time that it doesn't materially enter into the decisions

00:18of households and firms.

00:19Can you say that today, that we have that price stability, that households and businesses

00:20are ignoring price growth, when you see buy-in-advance, psychology, big changes in inventory?

00:21And surveys that show consumers, at least in the short run, expect higher inflation?

00:36So I do like that definition a lot.

00:39In fact, I used it at the recent conference where I spoke.

00:42So I think a world where people can make their daily economic decisions in businesses and

00:47they're not having to think about the possibility of significantly high inflation.

00:51We know inflation will bounce around.

00:53That is price stability.

00:54You know, I think we were getting closer and closer to that.

00:57I wouldn't say we were at that.

01:00Inflation was running around 2.5 percent for some time.

01:03I do think with the arrival of the tariff inflation, further progress may be delayed.

01:10The SEP doesn't really show further downward progress on inflation this year, and that's

01:14really due to the tariffs coming in.

01:17So delayed, but if you look at our forecasts, we do see ourselves getting back into the

01:22low 2s in 26, and then down to 2 by 27, of course, highly uncertain.

01:27So I see progress having been made toward that, and then progress in the future.

01:32I think that progress is probably delayed for the time being.

01:35If that's the case, why are there cuts in the SEP for 2025?

01:40So again, people wrote down two cuts the last time, and they look at the, you know,

01:46they wrote down, you know, meaningful decline in growth from 2.1 to 1.7 in 2025, a tick

01:55up in the unemployment rate, so not much there, but core inflation up by three-tenths, and

02:00so those two kind of balance each other out.

02:02So people, not everybody, but on balance, people wrote down similar numbers.

02:07The changes aren't that big.

02:09The other factor, though, as I mentioned, is just really high uncertainty.

02:13What would you write down?

02:14I mean, it's just, it's really hard to know how this is going to work out, and again,

02:20we think our policy is in a good place.

02:21We think it's a good place where we can move in the direction where we need to, but in

02:26the meantime, it's really appropriate to wait for further clarity, and of course, you know,

02:31the costs of doing that, given that the economy is still solid, are very low.

02:36Good work.

Fed Chair Powell Says Progress Towards Lowering Inflation 'Is Probably Delayed For The Time Being'

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