January 31, 2024
Statement·Presser·Minutes·Policy
Jerome H. Powell
January 31, 2024 FOMC Press Conference
- The chair said the FOMC believes the policy rate is likely at its peak for this tightening cycle and that it will likely be appropriate to begin dialing back policy restraint at some point this year.
- The chair said the FOMC has gained confidence that inflation is moving sustainably down to 2 percent, but wants greater confidence, and that six months of good inflation data are not yet enough to confirm a sustainable path.
- The chair said the FOMC is not looking for a weaker labor market, and that an unexpected weakening in the labor market would weigh on cutting rates sooner.
- The chair said the FOMC consulted a range of Taylor rules and other policy rules, but does not set policy by them, and that the timing of rate cuts will be linked to gaining confidence on inflation.
- The chair said the FOMC has a wide disparity of views on the rate path, and that there was no proposal to cut rates at the meeting.
From the opening statement
Press conference
CHAIR POWELL. Good afternoon. My colleagues and I remain squarely focused on our dual mandate to promote maximum employment and stable prices for the American people. The economy has made good progress toward our dual-mandate objectives. Inflation has eased from its highs without a significant increase in unemployment. That’s very good news. But inflation is still too high, ongoing progress in bringing it down is not assured, and the path forward is uncertain. I want to assure the American people that we’re fully committed to returning inflation to our 2 percent goal. Restoring price stability is essential to achieve a sustained period of strong labor market conditions that benefit all.
Today, the FOMC decided to leave our policy interest rate unchanged and to continue to reduce our securities holdings. Over the past two years, we’ve significantly tightened the stance of monetary policy. Our strong actions have moved our policy rate well into restrictive territory, and we’ve been seeing the effects on economic activity and inflation. As labor market tightness has eased and progress on inflation has continued, the risks to achieving our employment and inflation goals are moving into better balance. I will have more to say about monetary policy— about monetary policy, after briefly reviewing economic developments.
Recent indicators suggest that economic activity has been expanding at a solid pace. GDP growth in the fourth quarter of last year came in at 3.3 percent. For 2023 as a whole, GDP expanded at 3.1 percent, bolstered by strong consumer demand as well as improving supply conditions. Activity in the housing sector was subdued over the past year, largely reflecting high mortgage rates. High interest rates also appear to have been weighing on business fixed investment.