September 18, 2024
Jerome H. Powell
September 18, 2024 FOMC Press Conference
- Chair Powell said the FOMC's decision to cut by 50 basis points was supported by data since the last meeting, including two employment reports, two inflation reports, and the QCEW report suggesting payroll numbers may be revised down.
- Chair Powell said all 19 FOMC participants wrote down multiple rate cuts this year in the SEP, with 17 projecting three or more cuts and 10 projecting four or more.
- Chair Powell said the median SEP projection for the federal funds rate is 4.4 percent at the end of 2024 and 3.4 percent at the end of 2025.
- Chair Powell said the FOMC is not thinking about stopping balance sheet runoff because of the rate cut, as reserves remain abundant and stable.
- Chair Powell said the labor market has returned to or below 2019 levels by many measures, which he described as a strong labor market.
From the opening statement
Press conference
CHAIR POWELL. Good afternoon. My colleagues and I remain squarely focused on achieving our dual-mandate goals of maximum employment and stable prices for the benefit of the American people. Our economy is strong overall and has made significant progress toward our goals over the past two years. The labor market has cooled from its formerly overheated state. Inflation has eased substantially from a peak of 7 percent to an estimated 2.2 percent as of August. We ’re committed to maintaining our economy’s strength by supporting maximum employment and returning inflation to our 2 percent goal.
Today, the Federal Open Market Committee decided to reduce the degree of policy restraint by lowering our policy interest rate by ½ percentage point. This decision reflects our growing confidence that with an appropriate recalibration of our policy stance, strength in the labor market can be maintained in a context of moderate growth and inflation moving sustainably down to 2 percent. We also decided to continue to reduce our securities holdings. I will have more to say about monetary policy after briefly reviewing economic developments.
Recent indicators suggest that economic activity has continued to expand at a solid pace. GDP rose at an annual rate of 2.2 percent in the first half of the year, and available data point to a roughly similar pace of growth this quarter. Growth of consumer spending has remained resilient, and investment in equipment and intangibles has picked up from its anemic pace last year. In the housing sector, investment fell back in the second quarter after rising strongly in the first. Improving supply conditions have supported resilient demand and the strong performance of the U.S. economy over the past year. In our Summary of Economic Projections, Committee participants generally expect GDP growth to remain solid, with a median projection of 2 percent over the next few years.