July 27, 2022
Jerome H. Powell
July 27, 2022 FOMC Press Conference
- The chair said the FOMC considered a full percentage point increase but decided on 75 basis points, with broad support for the move.
- The chair stated that the federal funds rate is now in the range of neutral, and the FOMC aims to reach a moderately restrictive level by the end of the year, citing the June SEP median of 3¼ to 3½ percent.
- The chair noted that the labor market is extremely tight, with the unemployment rate near a 50-year low and job vacancies near historical highs, and that employment rose by an average of 375,000 jobs per month over the past three months.
- The chair said that the full effects of the large and rapid rate hikes have likely not yet been felt by the economy, and there is probably significant additional tightening in the pipeline.
- The chair acknowledged that the path to bringing down inflation while sustaining a strong labor market has narrowed, and that a period of below-trend growth and some softening in labor market conditions is likely necessary to restore price stability.
From the opening statement
Press conference
CHAIR POWELL. Good afternoon. My colleagues and I are strongly committed to bringing inflation back down, and we’re moving expeditiously to do so. We have both the tools we need and the resolve it will take to restore price stability on behalf of American families and businesses.
The economy and the country have been through a lot over the past two and a half years and have proved resilient. It is essential that we bring inflation down to our 2 percent goal if we are to have a sustained period of strong labor market conditions that benefit all.
From the standpoint of our congressional mandate to promote maximum employment and price stability, the current picture is plain to see: The labor market is extremely tight, and inflation is much too high. Against this backdrop, today the FOMC raised its policy interest rate by ¾ of a percentage point and anticipates that ongoing increases in the target range for the federal funds rate will be appropriate. In addition, we are continuing the process of significantly reducing the size of our balance sheet. And I’ll have more to say about today’s monetary policy actions after briefly reviewing economic developments.