FOMC Press Conference Introductory Statement, September 20, 2023

TL;DR

The Federal Reserve remains committed to reducing inflation and maintaining price stability while considering the evolving economic outlook.

Transcript

good afternoon everyone 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 two percent goal price stability is the responsibility of th... Read More

Key Insights

• ✊ The Federal Reserve is committed to reducing inflation to support stable prices and preserve the purchasing power of individuals.
• ❓ Economic indicators suggest solid economic growth, particularly in real GDP and consumer spending.
• 😄 While the labor market remains tight, there are signs of easing wage growth and a decline in job vacancies.
• 🙈 The current stance of monetary policy is seen as restrictive, with potential downward pressure on economic activity, employment, and inflation.
• 📲 The Federal Reserve assesses incoming data, evolving outlooks, and risks to determine the extent of additional policy firming that may be appropriate.
• ☠️ Real interest rates are well above estimates of the neutral policy rate, and further rate increases may be considered if appropriate.
• ❓ The Federal Reserve recognizes the uncertainties in gauging the stance of policy, but the focus remains on bringing inflation down sustainably.

Questions & Answers

Q: What is the Federal Reserve's dual mandate?

The Federal Reserve is tasked with promoting maximum employment and stable prices for the American people. This means they aim to keep unemployment low and inflation at a moderate level.

Q: How has the Federal Reserve tightened monetary policy?

The Federal Reserve has raised its policy interest rate by 5.25 percentage points and has reduced its securities holdings at a brisk pace since early last year.

Q: Why did the Federal Reserve leave its policy interest rate unchanged?

The Federal Reserve decided to maintain the target range for the federal funds rate at its current level because they believe the current stance of monetary policy is restrictive and putting downward pressure on economic activity, employment, and inflation.

Q: What is the Federal Reserve's outlook for inflation?

Inflation remains above the desired target of 2%, with total price index and core prices rising 3.4% and 3.9% respectively over the past 12 months. The Federal Reserve expects inflation to moderate but acknowledges that more work needs to be done to reach the 2% goal sustainably.

Summary & Key Takeaways

• The Federal Reserve is focused on achieving maximum employment and stable prices for the American people by reducing high inflation.

• Economic indicators suggest solid economic activity, with growth in real GDP above expectations and robust consumer spending.

• The labor market remains tight, but with better balance between supply and demand, and inflation continues to be above the target of 2%.