Fed Chair Jerome Powell reiterated the FOMC's commitment to price stability and maximum employment. The 25 basis point cut in the fed funds target rate range to 3.50 to 3.75 percent comes at a time when inflation remains somewhat elevated and the unemployment rate has edged up. The FOMC's decision to make an incremental cut in the rate reflects the FOMC attention to the risks in the economy. This time a majority of voters on the committee gave slightly greater weight to the employment side of the mandate, although there were two dissents for no change in rate.

Powell repeated that there is no risk free path for monetary policy at this time. Powell noted that the base case for most policymakers is that price pressures from tariffs will be of limited duration, perhaps through the first quarter or so of 2026. We don't have precision on this, he added.The expectation that inflation is largely confined to tariff impacts means that the present inflation is less risky to the outlook than the weakening in the labor market.

Powell observed that even if hiring is down, the supply is labor is also down. As a consequence, the unemployment rate is not rising as quickly as it might. The labor market is weaker, but adjusting to the disruptions form the rapid adoption of AI or changing circumstances in the broader economy.

Powell indicated that after the December 10 rate cut, the fed funds rate is broadly within the range of neutral and less restrictive after three consecutive rate cuts of 75 basis points in all. He said that it will take some time for the impact of the cuts to be fully felt in the economy. In the meantime, he said that in the weeks before the next FOMC meeting on January 27-28, the FOMC will have much more data after the reports delayed by the government shutdown are released. At present, the FOMC is well positioned to make its decisions.

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.

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.