March 16, 2022
Jerome H. Powell
March 16, 2022 FOMC Press Conference
- The chair said the probability of a recession within the next year is not particularly elevated, citing strong aggregate demand and labor market conditions.
- The chair stated that the median projection for real GDP growth is 2.8 percent this year, 2.2 percent next year, and 2 percent in 2024.
- The chair noted that the median projection for the federal funds rate is 1.9 percent at the end of this year and 2.8 percent over the following two years, higher than the longer-run estimate.
- The chair said inflation is expected to begin coming down in the second half of the year, with the median projection at 4.3 percent this year, falling to 2.7 percent next year and 2.3 percent in 2024.
- The chair mentioned that the FOMC made good progress on a plan for reducing securities holdings and expects to announce the beginning of balance sheet reduction at a coming meeting.
From the opening statement
Press conference
CHAIR POWELL. Good afternoon. I want to begin by acknowledging the tremendous hardship the Ukrainian people are suffering as a result of Russia’s invasion. The human toll is tragic. The financial and economic implications for the global economy and the U.S. economy are highly uncertain.
At the Federal Reserve, we are strongly committed to achieving the monetary policy goals that Congress has given us: maximum employment and price stability. Today, in support of these goals, the FOMC raised its policy interest rate by ¼ percentage point. The economy is very strong, and against the backdrop of an extremely tight labor market and high inflation, the Committee anticipates that ongoing increases in the target range for the federal funds rate will be appropriate. In addition, we expect to begin reducing the size of our balance sheet at a coming meeting.
Economic activity expanded at a robust 5½ percent pace last year, reflecting progress on vaccinations and the reopening of the economy, fiscal and monetary policy support, and the healthy financial positions of households and businesses. The rapid spread of the Omicron variant led to some slowing in economic activity early this year . But cases have declined sharply since mid-January, and the slowdown seems to have been mild and brief. Although the invasion of Ukraine and related events represent a downside risk to the outlook for economic activity, FOMC participants continue to foresee solid growth. As shown in our Summary of Economic Projections, the median projection for real GDP growth stands at 2.8 percent this year, 2.2 percent next year, and 2 percent in 2024.