November 2, 2022
Jerome H. Powell
November 2, 2022 FOMC Press Conference
- The chair said the U.S. economy has slowed significantly from last year’s rapid pace, with real GDP unchanged so far this year despite a 2.6 percent rise last quarter.
- The chair noted the labor market remains extremely tight, with the unemployment rate at a 50-year low and job vacancies still very high, though job gains have slowed from earlier in the year.
- The chair stated that incoming data since the last meeting suggest the ultimate level of interest rates will be higher than previously expected.
- The chair said the time to slow the pace of rate increases is coming and may come as soon as the next meeting or the one after that, but no decision has been made.
- The chair said it is very premature to think about or be talking about pausing the rate hike, as the Fed has "a ways to go" to reach a sufficiently restrictive level.
From the opening statement
Press conference
CHAIR POWELL. Good afternoon. My colleagues and I are strongly committed to bringing inflation back down to our 2 percent goal. We have both the tools that we need and the resolve it will take to restore price stability on behalf of American families and businesses. Price stability is the responsibility of the Federal Reserve and serves as the bedrock of our economy. Without price stability, the economy does not work for anyone. In particular, without price stability, we will not achieve a sustained period of strong labor market conditions that benefit all.
Today, the FOMC raised our policy interest rate by 75 basis points. And we continue to anticipate that ongoing increases will be appropriate. We are moving our policy stance purposefully to a level that will be sufficiently restrictive to return inflation to 2 percent. In addition, we are continuing the process of significantly reducing the size of our balance sheet. Restoring price stability will likely require maintaining a restrictive stance of policy for some time. I will have more to say about today’s monetary policy actions after briefly reviewing economic developments.
The U.S. economy has slowed significantly from last year’s rapid pace. Real GDP rose at a pace of 2.6 percent last quarter but is unchanged so far this year. Recent indicators point to modest growth of spending and production this quarter. Growth in consumer spending has slowed from last year’s rapid pace, in part reflecting lower real disposable income and tighter financial conditions. Activity in the housing sector has weakened significantly, largely reflecting higher mortgage rates. Higher interest rates and slower output growth also appear to be weighing on business fixed investment.