Highlights
The prospect of eventual rate cuts were not part of the opening statement, instead Jerome Powell repeated that the Fed is prepared to keep monetary policy restrictive until policy makers are confident that inflation is returning to the 2 percent goal.
Powell described US economic growth as"above expectations" reflected in GDP upgrades to the Fed's quarterly forecasts; consumer spending he said is"particularly robust" with housing"picking up somewhat" despite higher interest rates which, however, are"weighing" on fixed business investment. He said supply and demand in the labor market is"coming into better balance" reflected in slowing for job gains and for job openings as well as"some signs of easing" in nominal wage growth.
Powell said inflation has"moderated somewhat" since mid last year but still has a"long way to go". He noted forecasts for higher policy rates in the quarterly forecasts up a half percentage point in both 2023 and 2024 but stressed that this is only a projection and would be dependent on how economic conditions unfold. He said the Fed is"prepared to raise rates further if appropriate".
In the Q&A that followed on the Chair's opening remarks, Powell reiterated that the FOMC decisions now and in the near future are on a meeting-by-meeting basis. After 525 basis points of rate increases since March 2022, it is time to slow down and take a cautious approach to monetary policy. Powell noted that the risks of doing too much versus too little have"become more two-sided". At this point, it is"natural" for policymakers"to move a little more slowly" to achieve the"right level of restriction" in interest rate policy.
Powell said that the FOMC would consider the"totality" of the data in making its next monetary policy decisions. A government shutdown and delays in receiving data reports could impact the FOMC's decision making process, but Powell declined to comment on that in advance.
Powell emphasized that the forecasts in the summary of economic projections are not a"plan" for the next steps in monetary policy, and that the forecasts are subject to uncertainty. The quarterly revision to the summary included a new year of data 2026 and encompassed the most recent evidence that the US economy is growing faster than previously thought, that unemployment remains low despite cooling in the labor market, and that getting inflation down to the 2 percent target is a multi-year prospect. The summary still forecasts one more rate hike in 2023 of 25 basis points, but the FOMC's data dependence means policy will adapt based on the numbers reported. The forecast looks for the first rate cuts next year, but offered no hint as to the timing, just that cuts totaling 50 basis points are anticipated.
Powell was clear that FOMC participants are united in their determination to bring inflation back to target. Whether more hikes are needed is a subject of debate, but restrictive policy is expected to be in place for some time yet.
Powell described US economic growth as"above expectations" reflected in GDP upgrades to the Fed's quarterly forecasts; consumer spending he said is"particularly robust" with housing"picking up somewhat" despite higher interest rates which, however, are"weighing" on fixed business investment. He said supply and demand in the labor market is"coming into better balance" reflected in slowing for job gains and for job openings as well as"some signs of easing" in nominal wage growth.
Powell said inflation has"moderated somewhat" since mid last year but still has a"long way to go". He noted forecasts for higher policy rates in the quarterly forecasts up a half percentage point in both 2023 and 2024 but stressed that this is only a projection and would be dependent on how economic conditions unfold. He said the Fed is"prepared to raise rates further if appropriate".
In the Q&A that followed on the Chair's opening remarks, Powell reiterated that the FOMC decisions now and in the near future are on a meeting-by-meeting basis. After 525 basis points of rate increases since March 2022, it is time to slow down and take a cautious approach to monetary policy. Powell noted that the risks of doing too much versus too little have"become more two-sided". At this point, it is"natural" for policymakers"to move a little more slowly" to achieve the"right level of restriction" in interest rate policy.
Powell said that the FOMC would consider the"totality" of the data in making its next monetary policy decisions. A government shutdown and delays in receiving data reports could impact the FOMC's decision making process, but Powell declined to comment on that in advance.
Powell emphasized that the forecasts in the summary of economic projections are not a"plan" for the next steps in monetary policy, and that the forecasts are subject to uncertainty. The quarterly revision to the summary included a new year of data 2026 and encompassed the most recent evidence that the US economy is growing faster than previously thought, that unemployment remains low despite cooling in the labor market, and that getting inflation down to the 2 percent target is a multi-year prospect. The summary still forecasts one more rate hike in 2023 of 25 basis points, but the FOMC's data dependence means policy will adapt based on the numbers reported. The forecast looks for the first rate cuts next year, but offered no hint as to the timing, just that cuts totaling 50 basis points are anticipated.
Powell was clear that FOMC participants are united in their determination to bring inflation back to target. Whether more hikes are needed is a subject of debate, but restrictive policy is expected to be in place for some time yet.
Definition
The Fed announced in 2011 that then Fed Chair Ben Bernanke would hold press briefings four times a year to explain the FOMC's latest quarterly economic projections. The purpose of the briefings is to provide additional context for the FOMC's policy decisions and to allow for questions-and-answers with the press. According to the Fed, the"introduction of regular press briefings is intended to further enhance the clarity and timeliness of the Federal Reserve's monetary policy communication." The press briefing is held at 2:30 p.m. ET on the days of FOMC statements in which quarterly projections are released. Beginning in 2019, the briefing will be held after each FOMC meeting. The policy statement is released at 2:00 p.m. ET after the conclusion of every FOMC meeting regardless of whether there are forecasts or not.
Description
The Fed’s meeting statement and economic projections can move financial markets. However, the Fed’s meeting statement — which indicates any changes in monetary policy—typically is very concise and lacking in detail. However, the Fed now releases its economic forecasts four times a year. As of March 20, 2013, the forecasts are released at the same time as the FOMC statement during the months of March, June, September, and December. After each of the 8 Fed meetings, the chair holds a press conference to explain the forecasts and other policy issues. The chair’s press conference allows for the financial markets and public in general to learn more about why and how the monetary policy decision was made and to learn more about FOMC views on the direction of the economy—including real growth, inflation, unemployment, expected timing of changes in the fed funds rate, and expected levels of the fed funds rate in the near term.
