Experiential Wealth, Inc.
Experiential Wealth, Inc.
Experiential Wealth, Inc.


Jerome Powell’s Speech at Stanford

Apr 3, 2024 | Central Bank, FOMC, Individuals, Institutions

Highlights of Jerome Powell’s Speech at Stanford

  • Over the past year, inflation has come down significantly, and growth in economic activity and employment was strong. Labor supply increased significantly, thanks to rising participation among 25-to-54-year-olds, as well as a strong pace of immigration. This combination of outcomes reflects significant improvements in supply that offset to some extent the effects on demand of tighter financial conditions. Also, the healing of global supply chains helped address pent-up demand for goods, particularly in sectors that had faced considerable shortages. (good news)
  • Although the higher inflation data over January and February were above the low readings in the second half of last year, this does not materially change the overall picture, which continues to be one of solid growth, a strong but rebalancing labor market, and inflation moving down toward 2 percent on a sometimes bumpy path. (stay the course)
  • Labor market rebalancing is evident in data on quits, job openings, surveys of employers and workers, and the continued gradual decline in wage growth. (full employment mandate still looks good and on track)
  • On inflation, it is too soon to say whether the recent readings represent more than just a bump. We do not expect that it will be appropriate to lower our policy rate until we have greater confidence that inflation is moving sustainably down toward 2 percent. (not enough confidence on inflation reaching the 2% target)
  • I continue to believe that the policy rate is likely at its peak for this tightening cycle. (no more hikes)
  • Reducing rates too soon or too much could result in a reversal of the progress we have seen on inflation and ultimately require even tighter policy to get inflation back to 2 percent. But easing policy too late or too little could unduly weaken economic activity and employment. (clearly understands the risks associated with the timing of policy action)
  • We are making decisions meeting by meeting, and we will do everything we can to achieve our maximum-employment and price-stability goals. (commitment to the dual mandate)
  • Congress granted the Fed a substantial degree of independence in its conduct of monetary policy. This independence both enables and requires us to make our monetary policy decisions without consideration of short-term political matters. (Fed decision is independence and not influenced by short-term political matters)
  • Doing our job well requires that we respect the limits of our mandate. (no mission creep)

For the full speech, click here.