FOMC Press Conference January 29, 2020

TL;DR

Chair Powell addresses economic outlook, monetary policy, and financial stability with a focus on inflation and employment.

Transcript

Transcript of Chair Powell's Press Conference January 29, 2020 CHAIR POWELL. Good afternoon, everyone. Thanks for being here. At today's meeting, my colleagues and I decided to leave our policy rate unchanged. As always, we base our decisions on our judgment of how best to achieve the goals Congress has given us: maximum employment and price stabil... Read More

Key Insights

• 😫 The Fed's primary focus is on achieving maximum employment and stable prices set by Congress.
• 😘 Low interest rates have helped drive economic growth and recovery post-financial crisis.
• 😀 Chair Powell emphasizes the overall benefits of monetary policy for the economy, despite challenges faced by savers.
• 🏃 The Fed is considering an average inflation-targeting framework to address inflation running below 2 percent.

Questions & Answers

Q: How does Chair Powell justify the impact of low interest rates on savers?

Chair Powell explains that the primary focus is on achieving maximum employment and stable prices for the overall economy. Low interest rates have helped drive economic growth and recovery post-crisis.

Q: What steps is the Federal Reserve taking to address inflation running below the 2 percent target?

Chair Powell mentions that they are considering an average inflation-targeting framework, aiming to bring inflation back to the 2 percent objective. The goal is to ensure policy effectiveness in achieving the target.

Q: How is the Fed monitoring potential risks to financial stability, such as high asset valuations?

Powell states that while asset valuations are elevated, overall vulnerabilities to financial stability are moderate. The Fed focuses on a broad range of financial conditions and closely monitors leverage, funding risk, and economic developments.

Q: How is the Fed preparing for potential economic impacts from external factors such as the coronavirus outbreak?

Powell acknowledges the uncertainty surrounding the coronavirus and its potential impact on the Chinese and global economies. The Fed is closely monitoring the situation and its implications for economic growth.

Summary & Key Takeaways

• Chair Powell discusses monetary policy, focusing on achieving maximum employment and stable prices set by Congress.

• He highlights the impact of low interest rates on economic growth and the labor market recovery post-financial crisis.

• Powell sympathizes with savers affected by low interest rates but emphasizes the overall benefits of monetary policy for the economy.