US Federal Reserve Chairman Jerome Powell holds a press conference after the US Federal Open Market Committee (FOMC) meeting. Photographed on the 28th. REUTERS/Jonathan Ernst
[Reuters]- The Federal Reserve Board (FRB) decided at the Federal Open Market Committee (FOMC) meeting held on the 27th-28th to keep the federal funds (FF) interest rate target at 3.50-3.75%.
The details of Fed Chairman Jerome Powell’s post-FOMC press conference are as follows:
*US economy is strong
*Current policy stance is appropriate
*Current policies encourage progress toward two goals
*Activities in the housing sector are weak
*Impact of temporary government shutdown should be resolved by the end of this quarter
*The labor market may be stabilizing.
*Employment growth reflects a decline in the labor force, but labor demand is also clearly softening.
*Inflation rate remains high, slightly above target
*Core PCE price index is expected to increase by 3% in December 2025
*Disinflation appears to be continuing in the service sector.
*Policy rate is within a reasonable estimate of the neutral rate
*We are in a better position to determine the extent and timing of additional interest rate adjustments
*Policies are not on a predetermined path
*Decisions will be made at each meeting
Q&A:
*Attendance appropriate for most important trial in Fed history
*I can’t answer anything today.
* Refrain from commenting
*”Don’t get involved in politics”
*Elected politicians should not be involved in monetary policy decisions.
*The Fed won’t comment on the dollar.
＜Decision＞
*Wide support for today’s decision to leave the policy unchanged
*Decisions are made at each meeting; no decisions have been made regarding future meetings.
*Depends on data
*It is difficult to judge that the policy is significantly tightened based on the data available.
*Probably mildly neutral or somewhat tight
* Considerable progress has been made in the normalization process
*We are in a good position to assess economic trends
*Raising interest rates is not everyone’s base scenario
*Data distortion (due to government shutdown) no longer noticeable
*Economic activity outlook has clearly improved since the last meeting
*Inflation continues as expected
– Tensions between the twin imperatives of employment and inflation, which still exist, have eased somewhat
*Upside risks to inflation and downside risks to employment have receded
*The impact of tariffs on prices is likely to be temporary
*Most of the reason inflation remains high is due to tariffs, not demand.
* Core PCE remains at a level slightly above 2%, excluding the impact of tariffs on goods.
*The impact of tariffs on goods is expected to peak this year and then recede.
*Needs consideration if downside risks to the labor market rise again
*Short-term inflation expectations have receded, which is reassuring
*Long-term inflation expectations reflect confidence in a return to 2%
*Labor market is softening
*Even if labor supply and demand are balanced, if no jobs are created, it is difficult to determine whether it is full employment.
*It is generally accepted that labor market data is more reliable than GDP
*Consumption expenditure varies depending on income level, but overall is good
*Economy is performing well so far despite major changes in trade policy
– Artificial intelligence (AI) capabilities may result in short-term job losses, but the overall impact is unknown
*There are many factors that move long-term interest rates, but short-term interest rates are not a major factor.
＜Meter Fiscal Deficit＞
*We are on an unsustainable trajectory and the sooner we respond, the better.
*Don’t read too much into the rise in gold prices
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