January 29, 2020
Statement·Presser·Minutes·Policy
Jerome H. Powell
January 29, 2020 FOMC Press Conference
- The chair said the expansion is in its 11th year, the longest on record.
- The chair said the unemployment rate has been near half-century lows for well more than a year, and prime-age labor force participation is at its highest level in more than a decade.
- The chair said total PCE inflation was 1.5 percent and core inflation was 1.6 percent over the 12 months through November, with similar readings expected for December.
- The chair said the technical adjustment to administered rates reverses a small downward adjustment made in September when money markets were volatile.
- The chair said reserves will need to be at a level high enough to remain ample even when the Treasury General Account peaks during the April tax season, around $1.5 trillion as the bottom end of the range.
From the opening statement
Press conference
CHAIR POWELL. Good afternoon, everyone. Thanks for being here. At today’s meeting, my colleagues and I decided to leave our policy rate unchanged. As always, we base our decisions on our judgment of how best to achieve the goals Congress has given us: maximum employment and price stability. We believe monetary policy is well positioned to serve the American people by supporting continued economic growth, a strong job market, and a return of inflation to our symmetric 2 percent goal.
The expansion is in its 11th year, the longest on record. Growth in household spending moderated toward the end of last year, but with a healthy job market, rising incomes, and upbeat consumer confidence, the fundamentals supporting household spending are solid. In contrast, business investment and exports remain weak, and manufacturing output has declined over the past year. Sluggish growth abroad and trade developments have been weighing on activity in these sectors. However, some of the uncertainties around trade have diminished recently, and there are some signs that global growth may be stabilizing after declining since mid-2018. Nonetheless, uncertainties about the outlook remain, including those posed by the new coronavirus. Overall, with monetary and financial conditions supportive, we expect moderate economic growth to continue.
The unemployment rate has been near half-century lows for well more than a year, and the pace of job gains remains solid. Participation in the labor force by people in their prime working years, ages 25 to 54, is at its highest level in more than a decade. And wages have been rising, particularly for lower-paying jobs. People who live and work in middle-income communities and low-income communities tell us that many who have struggled to find work are now finding new opportunities. Employment gains have been broad based across all racial and ethnic groups and all levels of education. These developments underscore for us the importance of sustaining the expansion so that the strong job market reaches more of those left behind.