FPJ News Service mumbai

Fed Chair Jerome H. Powell on Friday said inflation had moved much closer to the central bank’s objective, and the labour market had cooled from its formerly overheated state.“Upside risks to inflation had diminished. But the unemployment rate had increased by almost a full percentage point, a development that historically has not occurred outside of recessions,” Powell said.

Over the subsequent three FOMC meetings, Fed Chair said, “we recalibrated our policy stance, setting the stage for the labour market to remain in balance near maximum employment over the past year.” 

“Our policy rate is now 100 bps closer to neutral than it was a year ago, and the stability of the unemployment rate and other labour market measures allows us to proceed carefully as we consider changes to our policy stance. Nonetheless, with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance,” Powell added.

In his address at an economic symposium sponsored by the Federal Reserve Bank of Kansas City, Jackson Hole, Wyoming, Powell said, “This year, the economy has faced new challenges. Significantly higher tariffs across “our trading partners are remaking the global trading system. Tighter immigration policy has led to an abrupt slowdown in labour force growth. Over the longer run, changes in tax, spending, and regulatory policies may also have important implications for economic growth and productivity. There is significant uncertainty about where all of these polices will eventually settle and what their lasting effects on the economy will be,” he underlined.