November 1, 2023
Jerome H. Powell
November 1, 2023 FOMC Press Conference
- The chair said the FOMC has raised the policy interest rate by 5¼ percentage points since early last year.
- The chair said the Fed has decreased its securities holdings by more than $1 trillion.
- The chair said the staff did not put a recession back into the baseline forecast for the meeting.
- The chair said the FOMC is not thinking about rate cuts at all right now.
- The chair said the increase in longer-term yields does not appear to be caused by expectations of higher near-term policy rates.
From the opening statement
Press conference
CHAIR POWELL. Good afternoon, everyone. Welcome. My colleagues and I remain squarely focused on our dual mandate to promote maximum employment and stable prices for the American people. We 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 strong labor market conditions that benefit all.
Since early last year, the FOMC has significantly tightened the stance of monetary policy. We have raised our policy interest rate by 5¼ percentage points and have continued to reduce our securities holdings at a brisk pace. The stance of policy is restrictive—meaning that tight policy is putting downward pressure on economic activity and inflation—and the full effects of our tightening have yet to be felt. Today, we decided to leave our policy interest rate unchanged and to continue to reduce our securities holdings. Given how far we have come, along with the uncertainties and risks we face, the Committee is proceeding carefully. We will make decisions about the extent of additional policy firming and how long policy will remain restrictive based on the totality of the incoming data, the evolving outlook, and the balance of risks. I’ll have more to say about monetary policy after briefly reviewing economic developments.
Recent indicators suggest that economic activity has been expanding at a strong pace and well above earlier expectations. In the third quarter, real GDP is estimated to have risen at an outsized annual rate of 4.9 percent, boosted by a surge in consumer spending. After picking up somewhat over the summer, activity in the housing sector has flattened out and remains well below levels of a year ago, largely reflecting higher mortgage rates. Higher interest rates also appear to be weighing on business fixed investment.