FOMC Press Conference September 26, 2018 | Summary and Q&A

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September 26, 2018
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Federal Reserve
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FOMC Press Conference September 26, 2018

TL;DR

Chairman Powell highlights the strength of the US economy, gradual interest rate hikes, and the importance of sustaining the financial system. He does not foresee any major risks to the economy at present.

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Key Insights

  • 😘 The US economy is performing well with strong growth, low unemployment, and stable inflation.
  • ☠️ Gradual interest rate hikes are necessary to support the economy while avoiding overheating.
  • 💦 The Fed continuously works to strengthen the financial system and ensure effective regulation.
  • 😮 The impact of trade tensions and rising interest rates on the economy and consumer spending remains uncertain.

Transcript

Transcript of Chairman Powell's Press Conference September 26, 2018 CHAIRMAN POWELL: Good afternoon, everyone. Thanks for being here. I am going to start with an overview of how my colleagues and I see the economy, what we decided today, and then a bit about our expectations for the months ahead. Our economy is strong. Growth is running at a health... Read More

Questions & Answers

Q: How does the Federal Reserve determine when to stop the tightening cycle?

The Fed closely monitors incoming data to assess the impact of rate increases on the real economy. If the economy weakens or inflationary pressures rise unexpectedly, rate hikes may be adjusted accordingly.

Q: Are comments from President Trump about interest rate hikes discussed at FOMC meetings?

The Fed focuses exclusively on its mandate of maximum employment and price stability, considering the best thinking, theory, and evidence. Political factors do not influence decisions.

Q: What role does the stock market play in the Fed's decisions on interest rates?

The Fed takes financial conditions, including stock market performance, into consideration while making decisions. However, the main focus is on achieving its goals of supporting economic activity and maintaining price stability.

Q: How does the Fed assess financial stability risks?

The Fed closely monitors financial conditions and vulnerabilities. Currently, vulnerabilities are considered moderate, but countercyclical tools like the countercyclical capital buffer can be deployed if needed.

Summary & Key Takeaways

  • The US economy is strong with steady growth, low unemployment, rising wages, and stable inflation.

  • The Federal Reserve has been gradually raising interest rates to return to normal levels and sustain the strong economy.

  • The financial system is in a better position to support households and businesses, but vigilance and effective regulation are still necessary.

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