The U.S. #FederalReserve has cut benchmark rate by 50 bps to 4.75% to 5.00% target range.
The central bank's Chair, #JeromePowell addresses the media after the announcement. #NDTVProfitLive
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The central bank's Chair, #JeromePowell addresses the media after the announcement. #NDTVProfitLive
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NewsTranscript
00:00Good afternoon.
00:11My colleagues and I remain squarely focused on achieving our dual mandate goals of maximum
00:16employment and stable prices for the benefit of the American people.
00:20Our economy is strong overall and has made significant progress toward our goals over
00:24the past two years.
00:26The labor market has cooled from its formerly overheated state.
00:31Inflation has eased substantially from a peak of 7 percent to an estimated 2.2 percent as
00:37of August.
00:38We're committed to maintaining our economy's strength by supporting maximum employment
00:43and returning inflation to our 2 percent goal.
00:47Today, the Federal Open Market Committee decided to reduce the degree of policy restraint by
00:52lowering our policy interest rate by a half percentage point.
00:57This decision reflects our growing confidence that with an appropriate recalibration of
01:01our policy stance, strength in the labor market can be maintained in a context of moderate
01:07growth and inflation moving sustainably down to 2 percent.
01:12We also decided to continue to reduce our securities holdings.
01:17I will have more to say about monetary policy after briefly reviewing economic developments.
01:24Recent indicators suggest that economic activity has continued to expand at a solid pace.
01:29GDP rose at an annual rate of 2.2 percent in the first half of the year, and available
01:35data point to a roughly similar pace of growth this quarter.
01:40Growth of consumer spending has remained resilient, and investment in equipment and intangibles
01:44has picked up from its anemic pace last year.
01:48In the housing sector, investment fell back in the second quarter after rising strongly
01:52in the first.
01:55Improving supply conditions have supported resilient demand and the strong performance
01:58of the U.S. economy over the past year.
02:02In our summary of economic projections, committee participants generally expect GDP growth to
02:07remain solid with a median projection of 2 percent over the next few years.
02:14In the labor market, conditions have continued to cool.
02:17Payroll job gains averaged 116,000 per month over the past three months, a notable step
02:23down from the pace seen earlier in the year.
02:26The unemployment rate has moved up, but remains low at 4.2 percent.
02:32Nominal wage growth has eased over the past year, and the jobs-to-workers gap has narrowed.
02:37Overall, a broad set of indicators suggest that conditions in the labor market are now
02:42less tight than just before the pandemic in 2019.
02:46The labor market is not a source of elevated inflationary pressures.
02:52The median projection for the unemployment rate in the SEP is 4.4 percent at the end
02:57of this year, four-tenths higher than projected in June.
03:02Inflation has eased notably over the past two years, but remains above our longer-run
03:06goal of 2 percent.
03:08Statistics based on the Consumer Price Index and other data indicate that total PCE prices
03:13rose 2.2 percent over the 12 months ending in August, and that excluding the volatile
03:19food and energy categories, core PCE prices rose 2.7 percent.
03:26Longer-term inflation expectations appear to remain well-anchored, as reflected in a
03:31broad range of surveys of households, businesses, and forecasters, as well as measures from
03:36financial markets.
03:38The median projection in the SEP for total PCE inflation is 2.3 percent this year and
03:442.1 percent next year, somewhat lower than projected in June.
03:49Thereafter, the median projection is 2 percent.
03:55Our monetary policy actions are guided by our dual mandate to promote maximum employment
04:00and stable prices for the American people.
04:03For much of the past three years, inflation ran well above our 2 percent goal, and labor
04:08market conditions were extremely tight.
04:11Our primary focus had been on bringing down inflation, and appropriately so.
04:16We are acutely aware that high inflation imposes significant hardship as it erodes purchasing
04:22power, especially for those least able to meet the higher costs of essentials, like
04:27food, housing, and transportation.
04:30Our restrictive monetary policy has helped restore the balance between aggregate supply
04:34and demand, easing inflationary pressures and ensuring that inflation expectations remain
04:40well-anchored.
04:42Our patient approach over the past year has paid dividends.
04:46Inflation is now much closer to our objective, and we have gained greater confidence that
04:50inflation is moving sustainably toward 2 percent.
04:56As inflation has declined and the labor market has cooled, the upside risks to inflation
05:00have diminished and the downside risks to employment have increased.
05:05We now see the risks to achieving our employment and inflation goals as roughly in balance,
05:11and we are attentive to the risks to both sides of our dual mandate.
05:16In light of the progress on inflation and the balance of risks, at today's meeting,
05:19the Committee decided to lower the target range for the federal funds rate by a half
05:23percentage point to 4.75 percent to 5 percent.
05:28This recalibration of our policy stance will help maintain the strength of the economy
05:33and the labor market, and will continue to enable further progress on inflation as we
05:38begin the process of moving toward a more neutral stance.
05:42We are not on any pre-set course.
05:45We will continue to make our decisions meeting by meeting.
05:50We know that reducing policy restraint too quickly could hinder progress on inflation.
05:55At the same time, reducing restraint too slowly could unduly weaken economic activity
06:00and employment.
06:02In considering additional adjustments to the target range for the federal funds rate, the
06:06Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.
06:12In our SEP, FOMC participants wrote down their individual assessments of an appropriate path
06:18for the federal funds rate based on what each participant judges to be the most likely scenario
06:23going forward.
06:25If the economy evolves as expected, the median participant projects that the appropriate
06:30level of the federal funds rate will be 4.4 percent at the end of this year and 3.4 percent
06:36at the end of 2025.
06:39These median projections are lower than in June, consistent with the projections for
06:43lower inflation and higher unemployment, as well as the changed balance of risks.
06:49These projections, however, are not a Committee plan or decision.
06:53As the economy evolves, monetary policy will adjust in order to best promote our maximum
06:57employment and price stability goals.
07:01If the economy remains solid and inflation persists, we can dial back policy restraint
07:05more slowly.
07:07If the labor market were to weaken unexpectedly or inflation were to fall more quickly than
07:11anticipated, we are prepared to respond.
07:15Policy is well positioned to deal with the risks and uncertainties that we face in pursuing
07:20both sides of our dual mandate.
07:23The Fed has been assigned two goals for monetary policy, maximum employment and stable prices.
07:29We remain committed to supporting maximum employment, bringing inflation back down to
07:34our 2 percent goal, and keeping longer-term inflation expectations well anchored.
07:40Our success in delivering on these goals matters to all Americans.
07:44We understand that our actions affect communities, families, and businesses across the country.
07:50Everything we do is in service to our public mission.
07:53We at the Fed will do everything we can to achieve our maximum employment and price stability
07:57goals.
08:00I look forward to your questions.
08:04Steve Leisman, CNBC.
08:05Thank you, Mr. Chairman, for taking our questions.
08:07In July, you said you weren't necessarily thinking about a 50.
08:09You didn't want to be specific, but you said you weren't thinking about a 50.
08:12The inflation data last week came out a little firmer than expected.
08:16Oil was strong, third-quarter GDP running 3 percent.
08:20What changed that made the committee go 50, and how do you respond to the concerns that
08:24perhaps it shows the Fed is more concerned about the labor market, and I guess should
08:28we expect more 50s in the months ahead, and based on what, should we make that call?
08:34A lot of questions in there.
08:38Let me jump in.
08:42Since the last meeting, we have had a lot of data come in.
08:46We've had the two employment reports, July and August.
08:49We've also had two inflation reports, including one that came in during blackout.
08:54We had the QCEW report, which suggests that the payroll report numbers that we're getting
09:02may be artificially high and will be revised down.
09:06You know that.
09:08We've also seen anecdotal data like the Beige Book.
09:12We took all of those, and we went into blackout, and we thought about what to do, and we concluded
09:18that this was the right thing for the economy, for the people that we serve, and that's how
09:23we made our decision.
09:24So that's one question.
09:26What was the second and third?
09:29Sorry.
09:30Thank you, sir.
09:31How do we figure out in the months ahead, is there another 25 or 50 coming in, based
09:35on what, shall we make that call?
09:38Sure.
09:39A couple things.
09:40A good place to start is the SEP, but let me start with what I said, which was that
09:47we're going to be making decisions meeting by meeting, based on the incoming data, the
09:52evolving outlook, the balance of risks.
09:55If you look at the SEP, you'll see that it's a process of recalibrating our policy stance
10:03away from where we had it a year ago, when inflation was high and unemployment low, to
10:09a place that's more appropriate, given where we are now and where we expect to be.
10:12And that process will take place over time.
10:14There's nothing in the SEP that suggests the committee is in a rush to get this done.
10:20This process evolves over time.
10:22Of course, that's a projection.
10:24That's a baseline projection.
10:26We know, as I mentioned in my remarks, that the actual things that we do will depend on
10:30the way the economy evolves.
10:31We can go quicker, if that's appropriate.
10:33We can go slower, if that's appropriate.
10:35We can pause, if that's appropriate.
10:37But that's what we're contemplating.
10:38Again, I would point you to the SEP as just an assessment of what the committee is thinking
10:46today, what the individual members, rather, of the committee are thinking today, assuming
10:50that their particular forecasts are realized.
10:54Good.
10:55Chris.
10:56Hi.
10:57Chris Rugeber at Associated Press.
11:03The projections show that the Fed officials expect the Fed funds rate to still be above
11:08their estimate of long-run neutral by the end of next year.
11:11So does that suggest you see rates as restrictive for that entire period?
11:17Does that threaten the weakening of the job market that you said you'd like to avoid?
11:21Or does it suggest that maybe people see the short-run neutral as a little bit higher?
11:27I think the way I would really characterize it is this.
11:29I think people write down their estimate.
11:33I think every single person on the committee, if you ask them what's your level of certainty
11:36around that, they would say there's a wide range where that could fall.
11:41So I think we don't know.
11:42There are model-based approaches and empirically-based approaches that estimate what the neutral
11:47rate will be at any given time.
11:50But realistically, we know it by its works.
11:53So that leaves us in a place where we expect, in the base case, to be continuing to remove
11:59restriction, and we'll be looking at the way the economy reacts to that, and that'll be
12:03guiding us in our thinking about the question that we're asking at every meeting, which
12:07is, is our policy stance the appropriate one?
12:10We know, if you go back, we know that the policy stance we adopted in July of 2023 came
12:18at a time when unemployment was 3.5 percent and inflation was 4.2 percent.
12:22Today, unemployment is up to 4.2 percent, inflation is down to a few tenths above 2.
12:30So we know that it is time to recalibrate our policy to something that is more appropriate
12:37given the progress on inflation and on employment, moving to a more sustainable level, so that
12:44the balance of risks are now even.
12:46This is the beginning of that process I mentioned, the direction of which is toward a sense of
12:52neutral, and we'll move as fast or as slow as we think is appropriate in real time.
12:58What you have is our individual accumulation of individual estimates of what that will
13:03be in the base case.
13:05Howard?
13:07Howard Schneider with Reuters.
13:12How close was this in terms of the decision?
13:15You do have the first dissent by a governor since 2005, I think.
13:20Was the weight clearly in favor of a 50, or was this a very close decision?
13:25I think we had a good discussion.
13:28If you go back, I talked about this at Jackson Hole, but I didn't address the question of
13:34the size of the cut, left it open, and I think we left it open going into blackout.
13:39And so there was a lot of discussion back and forth, good diversity of opinion, excellent
13:43discussion today.
13:44I think there was also broad support for the decision that the committee voted on.
13:49I would add, though, look at the SEP.
13:52All 19 of the participants wrote down multiple cuts this year, all 19.
13:58That's a big change from June, right?
14:01Seven of them wrote down three or more, sorry, 17 of the 19 wrote down three or more cuts
14:08and 10 of the 19 wrote down four or more cuts.
14:10So there is a dissent and there's a range of views, but there's actually a lot of common
14:15ground as well.
14:17Follow up to that, now that this is in the books, can you give us some guidance, sort
14:22of follow up to Steve, on the pacing here?
14:25Would you expect this to be running every other meeting once we get into next year?
14:31We're going to take it meeting by meeting.
14:33As I mentioned, there's no sense that the committee feels it's in a rush to do this.
14:38We made a good, strong start to this, and that's really, frankly, a sign of our confidence.
14:43Since inflation is coming down toward 2% on a sustainable basis, that gives us the
14:49ability.
14:51We can make a good, strong start, and I'm very pleased that we did.
14:56To me, the logic of this, both from an economic standpoint and also from a risk management
15:00standpoint was clear, but I think we're going to go carefully, meeting by meeting, and make
15:06our decisions as we go.
15:09Gina.
15:10Hi, Chair Powell.
15:11Gina Smiley with the New York Times.
15:12Thanks for taking our questions.
15:13You and your colleagues in your economic projections today see the unemployment rate climbing to
15:144.4% and staying there.
15:15Obviously, historically, when the unemployment rate climbs that much over a relatively short
15:16period of time, it doesn't typically just stop.
15:17It continues increasing.
15:18And so I wonder if you can walk us through why you see the labor market stabilizing,
15:19sort of what's the mechanism there, and what do you see as the risks?
15:20So, again, the labor market is actually in solid condition, and our intention with our
15:47policy move today is to keep it there.
15:50You can say that about the whole economy.
15:51The U.S. economy is in good shape.
15:53It's growing at a solid pace.
15:56Inflation is coming down.
15:57The labor market is in a strong pace.
16:00We want to keep it there.
16:01That's what we're doing.
16:04Sorry, Nick.
16:08Nick DeMoroso, The Wall Street Journal.
16:15Senator Powell, does today's action constitute a catch-up in action given recent substantial
16:20revisions to the employment data, or is this larger-than-typical rate cut a function of
16:26the elevated nominal level of the policy rate such that an accelerated cadence could be
16:32expected to continue?
16:34Okay, multiple questions.
16:38So I would say we don't think we're behind.
16:41We do not think we're behind.
16:42We think this is timely.
16:44But I think you can take this as a sign of our commitment not to get behind.
16:48So it's a strong move.
16:50Sorry, your other question was?
16:51Well, is this about what happened in the employment data between this meeting and the last meeting,
16:56or is this about the level of the funds rate, the high nominal level of the funds rate relative
17:01to what might be expected if you're trying to maintain equilibrium?
17:05I think it's about – we come into this with a policy position that was put in place, as
17:13I mentioned, in July of 2023, which was a time of high inflation and very low unemployment.
17:19We've been very patient about reducing the policy rate.
17:24We've waited.
17:25Other central banks around the world have cut many of them several times.
17:28We've waited.
17:29And I think that patience has really paid dividends in the form of our confidence that
17:33inflation is moving sustainably down to 2 percent.
17:36So I think that is what enables us to take this strong move today.
17:40I do not think that anyone should look at this and say, oh, this is the new pace.
17:46You know, you have to think about it in terms of the base case.
17:49Of course, what happens will happen.
17:51So in the base case, what you see is – look at the SEP.
17:55You see cuts moving along.
17:57The sense of this is we're recalibrating policy down over time to a more neutral level,
18:03and we're moving at the pace that we think is appropriate given developments in the economy
18:09in the base case.
18:10The economy can develop in a way that would cause us to go faster or slower, but that's
18:14what the base case says.
18:15And then if I could follow up on the balance sheet.
18:18In 2019, when you did the mid-cycle adjustment, you ceased the balance sheet runoff.
18:23With a larger cut today, is there any – should there be any signal inferred about how the
18:29committee would approach end-state on the balance sheet policy?
18:34So in the current situation, reserves have really been stable.
18:39They haven't come down.
18:40So reserves are still abundant and expected to remain so for some time.
18:44As you know, the shrinkage in our balance sheet has really come out of the overnight
18:48RRP.
18:49So I think what that tells you is we're not thinking about stopping runoff because
18:54of this at all.
18:55We know that these two things can happen side by side.
18:59In a sense, they're both a form of normalization.
19:02And so for a time, you can have the balance sheet shrink, but also be cutting rates.
19:06Colby?
19:08Colby Smith with the Financial Times.
19:12Just following up on Gina's question on rising unemployment, is it your view that
19:16this is just a function of a normalizing labor market amid improved supply?
19:21Or is there anything to suggest that something more concerning perhaps is taking place here,
19:25given that other metrics of labor demand have softened too?
19:29And I guess in direct follow-up to Gina, why should we not expect a further deterioration
19:36in labor market conditions if policy is still restrictive?
19:40So I think what we're seeing is clearly labor market conditions have cooled off by
19:45any measure, as I talked about in Jackson Hole.
19:50But they're still at a level.
19:51The level of those conditions is actually pretty close to what I would call maximum
19:54employment.
19:55So you're close to mandate, maybe at mandate on that.
20:00So what's driving it?
20:02Clearly, payroll job creation has moved down over the last few months.
20:07And this bears watching.
20:10By many other measures, the labor market has returned to or below 2019 levels, which was
20:15a very good, strong labor market.
20:18But this is more sort of 2018, 17.
20:21So the labor market bears close watching.
20:24And we'll be giving it that.
20:27But ultimately, we think, we believe, with an appropriate recalibration of our policy,
20:32that we can continue to see the economy growing.
20:35And that will support the labor market.
20:36In the meantime, if you look at the growth in economic activity data, the retail sales
20:41data that we just got, second quarter GDP, all of this indicates an economy that is still
20:46growing at a solid pace.
20:48So that should also support the labor market over time.
20:52So but again, it bears watching, and we're watching.
20:56And just on the point about starting to see rising layoffs, if that were to happen, wouldn't
21:01the committee already be too late in terms of avoiding a recession?
21:06So our plan, of course, has been to begin to recalibrate.
21:10And as you know, we're not seeing rising claims.
21:13We're not seeing rising layoffs.
21:15We're not seeing that.
21:16And we're not hearing that from companies, that that's something that's getting
21:18ready to happen.
21:19So we're not waiting for that.
21:21Because there is thinking that the time to support the labor market is when it's strong,
21:29and not when you begin to see the layoffs.
21:30There's some more on that.
21:32So that's the situation we're in.
21:33We have, in fact, begun the cutting cycle now.
21:37And we'll be watching.
21:38And that'll be one of the factors that we consider.
21:40Of course, we're going to look at the totality of the data as we make these decisions, meeting
21:43by meeting.
21:45Michael McKeith.
21:48Michael McKeith with Bloomberg TV and radio.
21:52To follow up on that, what would constitute for you and the committee a deterioration
21:57in the labor market?
21:58You're pricing in, basically, by the end of next year, 200 basis points of cuts just to
22:04maintain a higher unemployment rate.
22:07Would you be moving to a more preemptive monetary policy style, rather than, as you did with
22:14inflation, waiting until the data gave you a signal?
22:18No, we're going to be watching all of the data.
22:22So as I mentioned in my remarks, if the labor market were to slow unexpectedly, then we
22:29have the ability to react to that by cutting faster.
22:32We're also going to be looking at our other mandate, though.
22:37We have greater confidence now that inflation is moving down to 2%.
22:41At the same time, our plan is that we will be at 2% over time.
22:48Policy we think is still restrictive, so that should still be happening.
22:51I'm just curious as to how sensitive you'll be to the labor market, since you forecast
22:57we are going to see higher unemployment and it is going to take a significant amount of
23:02monetary easing to just maintain it.
23:07What I would say is we don't think we need to see further loosening in labor market conditions
23:11to get inflation down to 2%.
23:15But we have a dual mandate, and I think you can take this whole action as, take a step
23:22back.
23:23What have we been trying to achieve?
23:24We're trying to achieve a situation where we restore price stability without the kind
23:28of painful increase in unemployment that has come sometimes with this inflation.
23:34That's what we're trying to do.
23:36And I think you can take today's action as a sign of our strong commitment to achieve
23:41that goal.
23:42Rachel.
23:43Hi, Chair Powell.
23:44Rachel Siegel from Washington Post.
23:45Thanks for taking our questions.
23:46You're describing this view that you don't think you're behind when it comes to the job
23:47market.
23:48Can you walk us through the specific data points that you've found to be most helpful
23:49in the discussions at this meeting?
23:50You've mentioned a couple, but would you be able to walk us through what that dashboard
23:51told you as far as what you noticed?
23:52Sure.
23:53I think the first thing that I would say is that we have a very strong commitment to achieving
23:54that goal.
23:55And I think you can take today's action as a sign of our strong commitment to achieve that
23:56goal.
23:57Rachel.
23:58Hi, Chair Powell.
23:59Rachel Siegel from Washington Post.
24:00Thanks for taking our questions.
24:01You've mentioned a couple, but would you be able to walk us through what that dashboard
24:04told you as far as what you noticed?
24:05Sure.
24:06I think the first thing that I would say is that we have a very strong commitment to achieving
24:07that goal.
24:08And I think you can take our questions as far as what you noticed?
24:09Sure.
24:10I think the first thing that I would say is that we have a very strong commitment to achieving
24:11that goal.
24:12And I think you can take our questions as far as what you noticed?
24:13Sure.
24:14I think the first thing that I would say is that we have a very strong commitment to achieving
24:15that goal.
24:16And I think you can take our questions as far as what you noticed?
24:17Sure.
24:18I think the first thing that I would say is that we have a very strong commitment to achieving
24:19that goal.
24:20And I think you can take our questions as far as what you noticed?
24:21Sure.
24:22I think the first thing that I would say is that we have a very strong commitment to achieving
24:23that goal.
24:24And I think you can take our questions as far as what you noticed?
24:25Sure.
24:26I think the first thing that I would say is that we have a very strong commitment to achieving
24:27that goal.
24:28And I think you can take our questions as far as what you noticed?
24:29Sure.
24:30I think the first thing that I would say is that we have a very strong commitment to achieving
24:31that goal.
24:32And I think you can take our questions as far as what you noticed?
24:33Sure.
24:34I think the first thing that I would say is that we have a very strong commitment to achieving
24:35that goal.
24:36And I think you can take our questions as far as what you noticed?
24:37Sure.
24:38I think the first thing that I would say is that we have a very strong commitment to achieving
24:39that goal.
24:40And I think you can take our questions as far as what you noticed?
24:41Sure.
24:42I think the first thing that I would say is that we have a very strong commitment to achieving
24:43that goal.
24:44And I think you can take our questions as far as what you noticed?
24:45Sure.
24:46I think the first thing that I would say is that we have a very strong commitment to achieving
24:47that goal.
24:48And I think you can take our questions as far as what you noticed?
24:49Sure.
24:50I think the first thing that I would say is that we have a very strong commitment to achieving
24:51that goal.
24:52And I think you can take our questions as far as what you noticed?
24:53Sure.
24:54I think the first thing that I would say is that we have a very strong commitment to achieving
24:55that goal.
24:56And I think you can take our questions as far as what you noticed?
24:57Sure.
24:58I think you can take our questions as far as what you noticed?
24:59Sure.
25:00I think the first thing that I would say is that we have a very strong commitment to achieving
25:01that goal.
25:02And I think you can take our questions as far as what you noticed?
25:03Sure.
25:04I think the first thing that I would say is that we have a very strong commitment to achieving
25:05that goal.
25:06And I think you can take our questions as far as what you noticed?
25:07Sure.
25:08I think the first thing that I would say is that we have a very strong commitment to achieving
25:09that goal.
25:10And I think you can take our questions as far as what you noticed?
25:11Sure.
25:12I think the first thing that I would say is that we have a very strong commitment to achieving
25:13that goal.
25:14And I think you can take our questions as far as what you noticed?
25:15Sure.
25:16I think you can take our questions as far as what you noticed?
25:17Sure.
25:18I think the first thing that I would say is that we have a very strong commitment to achieving
25:19that goal.
25:20And I think you can take our questions as far as what you noticed?
25:21Sure.
25:22I think the first thing that I would say is that we have a very strong commitment to achieving
25:23that goal.
25:24And I think you can take our questions as far as what you noticed?
25:25Sure.
25:26I think the first thing that I would say is that we have a very strong commitment to achieving
25:27that goal.
25:28And I think you can take our questions as far as what you noticed?
25:29Sure.
25:30I think the first thing that I would say is that we have a very strong commitment to achieving
25:31that goal.
25:32And I think you can take our questions as far as what you noticed?
25:33Sure.
25:34I think the first thing that I would say is that we have a very strong commitment to achieving
26:03The usual. Don't look for anything else. We'll see another labor report. We'll see another jobs report.
26:12I think we get a second jobs report on the day of the meeting, I think.
26:17No, on the Friday before the meeting. And inflation data. We'll get all this data.
26:24We'll be watching. It's always a question of look at the incoming data
26:29and ask what are the implications of that data for the evolving outlook and the balance of risks.
26:35And then go through our process and think, what's the right thing to do?
26:39Is policy where we want it to be to foster the achievement of our goals over time?
26:44So that's what it is, and that's what we'll be doing.
26:52Hi, Chair Powell. Neil Irwin with Axios.
26:54We've only been running a little above 100,000 jobs a month on payroll the last three months.
26:58Do you view that level of job creation as worrying or alarming,
27:01or would you be content if we were to kind of stick at that level?
27:05And relatedly, one of the welcome trends of the last couple of years has been labor market steam coming out
27:10through job openings falling rather than job losses.
27:13Do you think that trend has further to run,
27:15or do you see risk that further labor market cooling will have to come through job losses?
27:20So on the job creation, it depends on the inflows, right?
27:26So if you're having millions of people come into the labor force then,
27:29and you're creating 100,000 jobs, you're going to see unemployment go up.
27:33So it really depends on what's the trend underlying the volatility of people coming into the country.
27:39We understand there's been quite an influx across the borders,
27:43and that has actually been one of the things that's allowed the unemployment rate to rise.
27:49And the other thing is just the slower hiring rate, which is something we also watch carefully.
27:54So it does depend on what's happening on the supply side.
27:58And on the beverage curve question, yes, so we all felt on the committee, not all,
28:05but I think everyone on the committee felt that job openings were so elevated
28:09that they could fall a long way before you hit the part of the curve
28:12where job openings turned into higher unemployment, job loss.
28:17And, yes, I mean, I think we are – it's hard to know that you can't know these things with great precision,
28:23but certainly it appears that we're very close to that point, if not at it,
28:27so that further declines in job openings will translate more directly into unemployment.
28:35But it's been a great ride down.
28:38I mean, we've seen a lot of tightness come out of the labor market in that form
28:43without it resulting in lower employment.
28:52Thanks, Chip. Edward Lawrence, Fox Business.
28:55So we've heard some speculation that you may be going with the federal funds rate to 3.5%, maybe under 4%.
29:00And there's basically an entire generation that has experienced zero or near zero federal funds rate.
29:06Now, some think we're heading in that direction again.
29:08What's the likelihood that cheap money is now the norm?
29:11So this is a question – you mean after we get through all of this?
29:15It's just a great question that we just – we can only speculate about.
29:20Intuitively, most – many, many people anyway would say we're probably not going back to that era
29:25where there were trillions of dollars of sovereign bonds trading at negative rates,
29:30long-term bonds trading at negative rates.
29:33And it looked like the neutral rate might even be negative.
29:36So people were issuing debt at negative rates.
29:39It seems that's so far away now.
29:43My own sense is that we're not going back to that.
29:46But, you know, honestly, we're going to find out.
29:49But, you know, it feels to me that the neutral rate is probably significantly higher than it was back then.
29:58How high is it? I just don't think we know.
30:01Again, we only know it by its works.
30:03And one more.
30:04How do you respond to the criticism that will likely come that a deeper rate cut now
30:08before the election has some political motivations?
30:11Yeah, so, you know, this is my fourth presidential election at the Fed.
30:16And, you know, it's always the same.
30:18We're always going into this meeting in particular
30:22and asking what's the right thing to do for the people we serve.
30:26And we do that, and we make a decision as a group, and then we announce it.
30:32And that's always what it is.
30:33It's never about anything else.
30:35Nothing else is discussed.
30:37And I would also point out that the things that we do really affect economic conditions for the most part with a lag.
30:45So, nonetheless, this is what we do.
30:48Our job is to support the economy on behalf of the American people.
30:52And if we get it right, this will benefit the American people significantly.
30:56So this really concentrates the mind.
30:59And, you know, it's something we all take very, very seriously.
31:03We don't put up any other filters.
31:05I think if you start doing that, I don't know where you stop.
31:08And so we just don't do that.
31:10Joe Ling.
31:14Thank you, Chair Powell.
31:15I'm Jill Lincoln with CBS News.
31:17My first question is, very simply,
31:20what message are you trying to send American consumers, the American people, with this unusually large...