Highlights of Jerome Powell’s Fireside Chat at Spelman College
https://www.youtube.com/watch?v=1k9V584znqU
JOBS: Although the pace of new job creation remains strong, it has been slowing toward a more sustainable level and unemployment rate has edged up.
WAGES: Wage growth remains high but has been gradually moving toward levels that would be more consistent with 2 percent price inflation over time.
INFLATION: The Federal Reserve has a longer-run goal of 2 percent inflation and over the six months ending in October, core inflation ran at an annual rate of 2.5 percent. The progress must continue to reach “our 2 percent objective.”
PRICE STABILITY: The FOMC is strongly committed to bringing inflation down to 2 percent over time, and to keeping policy restrictive until we are confident that inflation is on a path to that objective.
THE GENERAL ECONOMY: The FOMC anticipates that growth in spending and output will slow over the next year, as the effects of the pandemic and the reopening fade and as restrictive monetary policy weighs on aggregate demand.
RESTRICTIVE TERRITORY: The strong actions we have taken have moved our policy rate well into restrictive territory, meaning that tight monetary policy is putting downward pressure on economic activity and inflation.
LONG & VARIABLE LAG: The full effects of our tightening have likely not yet been felt.
MONETARY POLICY RISKS: The FOMC is moving forward carefully, as the risks of under- and over-tightening are becoming more balanced.
NOT DONE YET: It would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance, or to speculate on when policy might ease. We are prepared to tighten policy further if it becomes appropriate to do so.
For the complete chat, click here.