Fed's Powell: Outlook for Employment and Inflation Have Not Changed Much; Inflation Has Eased but Remains "Somewhat Elevated"

Powell says that available data show that the outlook for employment and inflation have not changed much since the last meeting. He nods to the disruption of data due to the federal shutdown.

Powell emphasizes that the decision about upcoming Treasuries purchases is solely related to the purpose of maintaining “ample” bank reserves in the system.

“Consumer spending appears to have remained solid, and business-fixed investment has continued to expand,” but housing remains “weak,” Powell says.

The Fed chair repeats that some of the slowdown in hiring is due to slower labor force growth but says lower demand is also playing a role. He emphasized the risk of lower demand a lot after the previous rate cut as well.

Powell says inflation has eased but remains “somewhat elevated” compared to the Fed’s 2% longer-run goal.

Powell notes that “very little” data on inflation has been released since policymakers last met in October.