The data from recent months shows that we are making progress in achieving the dual goals of maximum employment and stable prices, "Federal Reserve Chairman Powell said at the New York Economic Club on October 19th local time.
Powell stated that inflation data has decreased during the summer, which is a very favorable development. But inflation is still too high, and the good data in recent months is only the beginning of building confidence.
We don't yet know how long these lower data will last, nor do we know where inflation will stabilize in the coming quarters, "Powell said; Although the road may be bumpy and take some time, my colleagues and I unanimously promise to continue reducing inflation to 2%& Quot;
Powell stated that he does not believe that the current interest rates are too high. Do you feel that the current policies are too tight? I must say no. At the same time, he also stated that raising interest rates is difficult for everyone.
In terms of the labor market, Powell mentioned that many indicators indicate that although the situation remains tense, the labor market is gradually cooling down.
In terms of economic growth, Powell believes that this year's economic growth has been unexpected. He mentioned that forecasters generally expect the US Gross Domestic Product (GDP) to be very strong in the third quarter, and then cool down in the fourth quarter and next year. However, historical records indicate that a sustainable return to the 2% inflation target may require a period of below-trend economic growth and further weakening of labor market conditions.
Powell further pointed out that the recent heightened geopolitical tensions pose significant risks to global economic activity. Our institutional responsibility at the Federal Reserve is to monitor the impact of these developments on the economy, and these impacts are still highly uncertain
Finally, Powell did not make a commitment to a specific monetary policy path. Considering uncertainty and risks, as well as the progress we have made, the Federal Open Market Committee (FOMC) is acting cautiously. We will decide on the extent of further tightening of policies and how long they will be maintained based on the upcoming overall data, changing prospects, and risk balance
According to data from CME Group, the market expects a 99.6% probability of the Federal Reserve maintaining interest rates unchanged at 5.25% -5.5% in November, and a 0.4% probability of a 25 basis point reduction.