March 22, 2023
Jerome H. Powell
March 22, 2023 FOMC Press Conference
- The chair said the Federal Reserve, Treasury, and FDIC took decisive actions to protect the U.S. economy and strengthen public confidence in the banking system, including creating the Bank Term Funding Program.
- The chair said deposit flows in the banking system have stabilized over the last week.
- The chair said the decision to raise rates by 25 basis points was supported by a very strong consensus, and that a pause was considered in the days running up to the meeting.
- The chair said the median projection for the federal funds rate is 5.1 percent at the end of this year, 4.3 percent at the end of 2024, and 3.1 percent at the end of 2025, little changed from December.
- The chair said the systemic risk exception to protect uninsured depositors at two banks was invoked due to the risk of contagion to other banks and financial markets, not about those specific banks.
From the opening statement
Press conference
CHAIR POWELL. Good afternoon. Before discussing today’s meeting, let me briefly address recent developments in the banking sector. In the past two weeks, serious difficulties at a small number of banks have emerged. History has shown that isolated banking problems, if left unaddressed, can undermine confidence in healthy banks and threaten the ability of the banking system as a whole to play its vital role in supporting the savings and credit needs of households and businesses. That is why, in response to these events, the Federal Reserve, working with the Treasury Department and the FDIC, took decisive actions to protect the U.S. economy and to strengthen public confidence in our banking system. These actions demonstrate that all depositors’ savings and the banking system are safe. With the support of the Treasury, the Federal Reserve Board created the Bank Term Funding Program to ensure that banks that hold safe and liquid assets can, if needed, borrow reserves against those assets at par. This program, along with our long-standing discount window, is effectively meeting the unusual funding needs that some banks have faced and makes clear that ample liquidity in the system is available.
Our banking system is sound and resilient, with strong capital and liquidity. We will continue to closely monitor conditions in the banking system and are prepared to use all of our tools as needed to keep it safe and sound. In addition, we are committed to learning the lessons from this episode and to work to prevent episodes—events like this from happening again.
Turning to the broader economy and monetary policy: Inflation remains too high, and the labor market continues to be very tight. My colleagues and I understand the hardship that high inflation is causing, and we remain strongly committed to bringing inflation back down to our 2 percent goal. Price stability is the responsibility of the Federal Reserve. Without price stability, the economy does not work for anyone. In particular, without price stability, we will not achieve a sustained period of long—of strong labor market conditions that benefit all.