FOMC Press Conference September 18, 2019 | Summary and Q&A

TL;DR

Federal Reserve Chair Powell announces a decrease in interest rates to help sustain the US economy amid global growth concerns and trade policy uncertainty.

Key Insights

• 🎭 The US economy has performed well, with solid household spending driving growth.
• 👨‍💼 Business investment and exports have weakened due to global growth slowdown and trade policy uncertainty.
• 🌍 Global growth outlook has weakened, notably in Europe and China, with unresolved geopolitical risks.
• 🏋️ Trade policy tensions and elevated uncertainty are weighing on US investment and exports.
• 😘 The job market remains strong, with low unemployment rates and solid job gains.
• 😘 Inflation continues to run below the 2% target, with muted inflation pressures and low longer-term inflation expectations.
• ☠️ The Federal Reserve's decision to lower interest rates supports the outlook for sustained economic expansion, strong labor market conditions, and inflation near the 2% objective.

Transcript

Transcript of Chair Powell's Press Conference September 18, 2019 CHAIR POWELL. Good afternoon, everyone, and welcome. My colleagues at the Federal Reserve and I are dedicated to serving the American people. We do this by steadfastly pursuing the goals Congress has given us: maximum employment and stable prices. We are committed to making the best d... Read More

Questions & Answers

Q: Why did the Federal Reserve decide to lower interest rates?

The Federal Reserve lowered interest rates to support the US economy amidst global growth concerns and ongoing trade policy uncertainty, which have affected business investment and exports.

Q: What are the key drivers of growth in the US economy?

Household spending, supported by a strong job market, rising incomes, and solid consumer confidence, has been the key driver of growth in the US economy.

Q: What risks does the US economy face?

The US economy faces risks from weak global growth, trade policy uncertainty, and geopolitical factors such as Brexit. Uncertainty about trade policy has discouraged business investment and exports, leading to softer growth in these areas.

Q: How does the Federal Reserve plan to address below-target inflation?

The Federal Reserve expects inflation to rise gradually to the 2% target. However, inflation pressures remain muted, and longer-term inflation expectations are at the lower end of historical ranges. Continued below-target inflation could affect longer-term inflation expectations, which the Federal Reserve will closely monitor.

Summary & Key Takeaways

• Chair Powell states that the US economy has remained strong, with solid household spending driving growth while business investment and exports have weakened due to global growth slowdown and trade policy uncertainty.

• The Federal Reserve lowers interest rates to support the economy and counter ongoing risks, such as weak global growth and trade tensions.

• Powell expects the job market to remain strong, as unemployment rates are projected to stay below 4% over the next few years, and inflation to gradually rise to the 2% target.