US macro data has consistently surprised to the upside since the July FOMC meeting, yet The Fed still decided to cut rates by 50bps on 9/18. Despite the strong economic data and a hawkish decline in rate-cut expectations, Fed Chair Powell is set to address the National Association for Business Economics (NABE) to explain the Fed’s decision and potential future rate reductions. The debate over the rate cut has already begun, with some expressing concern over a possible monetary policy mistake as a downside risk to the US economy.
Will Powell address the market’s dovishness or downplay the strength of recent macro data? Watch Powell’s speech live or read his full remarks for more insight into the current economic outlook, recent data on the labor market and inflation, and the Fed’s monetary policy stance.
It was time for a reassessment of our policy stance to align with the progress made towards our objectives and the evolving risk environment.
As previously mentioned, the decision to lower our policy rate by 50 basis points signifies our increasing confidence that, through an appropriate adjustment of our policy approach, the robustness of the labor market can be sustained amidst moderate economic expansion and inflation gradually declining to 2 percent.
Looking ahead, if the economy progresses as anticipated, policy adjustments will gradually steer towards a more neutral position. However, our course of action is not predetermined. The risks are balanced, and we will make decisions on a meeting-by-meeting basis. As we contemplate further policy modifications, we will meticulously evaluate incoming data, the evolving economic outlook, and risk considerations. Overall, the economy remains robust, and we are committed to utilizing our tools to uphold its strength.
We are unwavering in our dedication to achieving maximum employment and price stability. Every action we take is in fulfillment of our public mandate.
Thank you. I anticipate our discussion.
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