https://www.cmegroup.com/content/dam/cmegroup/images/common/default/article-940x600.jpg
US: Fed Chair Press Conference
Highlights
The much of the Q&A of Jerome Powell's press briefing was related to the end of his tenure as Chair. Powell congratulated Kevin Warsh on his nomination as governor and chair moving out of the Senate Banking Committee toward a confirmation vote by the full Senate. Powell announced that he did intend to remain as a governor for the time being.
Powell welcomed the closing of the current criminal investigation into the management of the Fed's renovation projects. However, he continues in his determination to remain on the Board until the matter is fully resolved. Powell said, I'm encouraged and watching the remaining steps carefully. He said, I will leave when I think it appropriate to do. However, he also sees unprecedented political pressure and ongoing threats to the independence of the Fed.
The legal assaults put the independence of the Fed at risk, Powell said. He stressed the importance of setting monetary policy based on analysis, our best thinking.
It is clear that the FOMC is turning more hawkish on inflation. Powell noted quite a vigorous discussion about the risks to economic outlook and risks from energy prices. Powell continues to expect that the price increases related to tariffs in 2025 will have passed through goods prices in the next quarter or two. The big unknown is the impact of higher oil prices that first hit in March 2026. Powell emphasized that the FOMC remains well-positioned to set rates and that current rates are near neutral or only slightly restrictive. At this point, a hikes is as likely as a cut in the policy outlook.
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.