FOMC Press Conference, March 20, 2024

good afternoon my colleagues and I remain squarely focused on our dual mandate to promote maximum employment and stable prices for the American people the economy has made considerable progress toward our dual mandate objectives inflation has eased substantially while the labor market has remained strong and that is very good news but inflation is still too high ongoing progress in bringing it down is not assured and the path forward is uncertain we are fully committed to returning inflation to our 2% goal restoring price stability is essential to achieve a sustainably strong labor market that benefits all today the fomc decided to leave our policy interest rate unchanged and to continue to reduce our Securities Holdings our restrictive stance of monetary policy has been putting downward pressure on economic activity and inflation as labor market tightness has eased and progress on inflation has continued the risks to achieving our employment and inflation goals are moving into better balance I will have more to say about monetary policy after briefly reviewing economic developments recent indicators suggest that economic activity has been expanding at a solid Pace GDP growth in the fourth quarter of last year came came in at 3.2% for 2023 as a whole GDP expanded 3.1% bolstered by strong consumer demand as well as improving Supply conditions activity in the housing sector was subdued over the past year largely reflecting High mortgage rates High interest rates also appear to have weighed on business fixed investment in our summary of economic projections committee participants generally expect GDP growth to slow from last year's Pace with a median projection of 2.1% this year and 2% over the next 2 years participants generally revised up their growth projections since December reflecting the strength of incoming data including data on labor Supply the labor market remains relatively tight but supply and demand conditions continue to come into better balance over the past 3 months payroll job gains averaged 265,000 jobs per month the unemployment rate has edged up but remains low at 3.9% strong job creation has been accompanied by an increase in the supply of workers reflecting increases in participation among individuals aged 25 to 54 years and a continued strong pace of immigration nominal wage growth has been easing and job vacancies have declined although the jobs to workers Gap has narrowed labor demand still exceeds the supply supply of available workers fomc participants expect the rebalancing in the labor market to continue easing upward pressure on inflation the median unemployment rate projection in the SCP is 4.0% at the end of this year and 4.1% at the end of next year inflation has eased notably over the past year but remains above our longer run goal of 2% estimates based on the Consumer Price Index and other data indicate that total pce Prices rose 2.5% over the 12 months ending in February and that excluding the volatile food and energy categories core pce prices Rose 2.8% longer term inflation expectations appear to remain well anchored as reflected in a broad range of surveys of households businesses and forecasters as well as from measures from financial markets the median projection in the SCP for total pce inflation Falls to 2.4% this year 2.2% next year and 2% in 2026 the fed's monetary policy actions are Guided by our mandate to promote maximum employment and stable prices for the American people my colleagues and I are acutely aware that high inflation imposes significant hardship as it erodes purchasing power especially for those least able to meet the higher cost costs of Essentials like food housing and transportation we are strongly committed to returning inflation to our 2% objective the committee decided at today's meeting to maintain the target range for the federal funds rate at 5 and a qu to 5 and a half% and to continue the process of significantly reducing our Securities Holdings as labor market tightness as eased and progress on inflation has continued the risks to achieving our employment and inflation goals are coming into better balance we believe that our policy rate is likely at its peak for this tightening cycle and that if the economy evolves broadly as expected it will likely be appropriate to begin dialing back policy restraint at some point this year the economic Outlook is uncertain however and we remain highly attentive to inflation risks we are prepared to maintain the current target range for the federal funds rate for longer if appropriate we know that reducing policy restraint too soon or too much could result in a reversal of the progress we have seen on inflation and ultimately require even tighter policy to get inflation back to 2% at the same time reducing policy restraint too late or too little could unduly weaken economic activity and employment in considering any adjustments to the target range for their federal funds rate the committee will carefully assess incoming data the evolving Outlook and the balance of risk risks the committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably down toward 2% of course we're committed to both sides of our dual mandate and an an unexpected weakening in the labor market could also warrant a policy response we will continue to make our decisions meeting by meeting in our SCP fomc participants wrote down their individual assessments of an appropriate pth for the federal funds rate based on what each participant judges to be the most likely scenario going forward if the economy evolves as projected the median participant projects that the appropriate level of the federal funds rate will be 4.6% at the end of this year 3.9% at the end of 2025 and 3.1% at the end of 2026 still above the medium median longer term funds rate these projections are not a committee decision or plan if the economy does not evolve as projected the path for policy will adjust as appropriate to Foster our maximum employment and price stability goals turning to our balance sheet our Securities Holdings have declined by nearly $1.5 trillion since the committee began reducing our portfolio at this meeting we discussed issues related to slowing the pace of decline in our Securities Holdings while we did not make any decisions today on this the general sense of the committee is that will be appropriate to slow the pace of runoff fairly soon consistent with the plans we previously issued the decision to slow the pace of runoff does not mean that our balance sheet will ultimately shrink by less than it would otherwise but rather allows us to approach that ultimate level more gradually in particular slowing the pace of runoff will help ensure a smooth transition reducing the possibility that money markets experience stress and thereby facilitating the ongoing decline in our Securities holders consistent with reaching the appropriate level of ample reserves we remain committed to Bringing inflation back down to our 2% goal and to keeping our longer term inflation expectations well anchored restoring price stability is essential to set the stage for achieving maximum employment and price stability over the long term to conclude we understand that our actions affect communities families and businesses across the country everything we do is in service to our public mission we at the FED will do everything we can to achieve our maximum employment and price stability goals thank you thank you micop Steve lean CNBC Mr chairman um the uh projections show somewhat higher core inflation they also show uh somewhat stronger growth um what should we infer from this notion that on average rates were kept the same this year but inflation is higher and growth is higher does it mean uh more tolerance for higher inflation and less of a willingness to slow the economy to achieve that Target well it it doesn't no it doesn't mean that what it means is that you know we uh we've seen incoming as you as uh as I pointed out in my opening remarks we did Mark up our growth uh forecast and so have many other forecasters so the econom is performing performing well um and the inflation data came in a little bit higher as a separate matter and I think that caused people to write up uh their their inflation um but nonetheless we continue to make good progress on bringing inflation down and uh so when when you uh just to follow up when you say that you're willing to either maintain the rate for longer is what is the tolerance of the Federal Reserve for inflation coming in above its 2% Target so we're we're strongly committed to bringing inflation down to 2% over time that is that is our goal and we will achieve that goal markets believe we will achieve that goal and they should believe that because that that's what that's what will happen over over time but we stress overtime and so um I think we're we're making projections that that do show that happening and we're we're committed to that outcome and we will bring it about r hi chair pal Rachel seagull from The Washington Post thanks for taking our questions you and others have been saying that relief on housing inflation is coming but it still hasn't shown up meaningfully in the CPI or the pce does that challenge your assumption about when the shift will finally break through since it hasn't at that point so I think there's some confidence that that uh that the market rents lower Market rent increases that we're seeing will show up in measures of housing uh Services inflation over time there's a little bit of uncertainty about when that will happen but there's real confidence that they will show up eventually uh over time but again uncertainty about the exact timing of that and will you be able to get overall inflation down to Target if housing doesn't break through quickly and does that affect the timing for eventual Cuts this year we will get aggregate inflation down to 2% over time we will and and I would assume that what we'll continue to see is we'll see Goods prices coming into a new equilibrium where they're going down perhaps not as quickly as they had been earlier this year uh where Housing Services inflation will come back down as as as current market rents are suggesting will happen and where non-housing services will move back down some combination of those three things and it may be different from the combination we had before the pandemic will be achieved and will bring inflation back down to 2% sustainably Nick Nick timos of the Wall Street Journal chair Powell during your Congressional testimony this month you said that your test for making the first change to interest rates does not require you to be terribly comfortable that inflation is at 2% because interest rates are well above neutral at the same time you said here after the last meeting that The First Cut is highly consequential can you reconcile these views for me if rates are well above neutral why would the first cut be highly consequential is that because you anticipate one cut would be followed by one or two more along the lines of the recalibration you made in 2019 which itself was modeled on the cycle adjustment of 1995 it's more I I would put it more in the context of what I said in our in my opening remarks that the the risks are really two-sided here we we're in a situation where you know if we ease uh if we ease too much or too soon we could see inflation come back and if we ease too late we could do unnecessary harm to employment and uh you know people's working lives and so you know we do see the risks as two-sided so it is consequential we want we want to be careful and fortunately with the economy growing with the labor market strong and with inflation coming down we can approach that question carefully and let the data speak on that uh that that's really what I was thinking how much of that inflation that we've seen so far this year do you chalk up to oneoff calendar adjustment effects following a period of high inflation versus some change in the trend we saw uh in the second half of last year so I want to start by being saying I always tried to be careful about dismissing uh data that we don't like so you need to check yourself on that and I'll do that but so the but I would say the January number which was very high the January CPI and pce numbers were quite High there's reason to think that that there could be seasonal effects there um but nonetheless we don't want to be completely dismissive of it the February number was high higher than expectations but we have it at currently well below 30 basis points core PC which is not terribly high so it's not like the January number but I take the two of them together and I I think they haven't really changed the overall story which is that of inflation moving down gradually on a sometimes bumpy road toward 2% I don't think that story has changed um I also don't think that those those readings added to anyone's confidence that we're moving closer to to that point but uh you know we didn't last thing I'll say is we didn't um uh excessively celebrate the the good inflation readings we got in the last seven months of last year we didn't um take too much signal out of that what you heard us saying was that we needed to see more that we could you know we wanted to be careful about that decision and we're not going to overreact as well to these these two months of data nor are we going to ignore them um hi yes chair Powell I I um could you speak a little bit more about the timing uh is there um enough data uh between now and say May to be able to get the kind of confidence that you say that you know you still need um or by June um is there enough data for you just give us a sense of your thinking there thank you yeah so we're we make decisions meeting by meeting and we didn't make any decisions or about about future meetings today uh those are going to depend on our ongoing assessment of of the incoming data the evolving Outlook and the balance of risk so I've I really don't have anything for you on any specific meeting looking forward but I mean just a question I mean is there even enough data for you to be able to we'll we'll take um you know things can happen during an inter meeting period if you look back unexpected things so I don't want to I wouldn't want to dismiss anything so I just would say that the committee wants to see um more data that gives us higher confidence that inflation is is moving down sustainably toward 2% I also mentioned uh and we don't see this in in the data right now but if there were a significant weakening in the data particularly in the labor market that could also be a reason for us to to begin the process of reducing rates again I don't there's nothing in the data pointing at that but those are the things that we'll be looking at at coming meetings and without without trying to refer to any specific meeting Chris hi uh Chris R Associated Press thank you um in the projections there is an increase in the neutral rate as you know and uh higher rates quarter point higher rates projected in 2025 20 26 um can you speak about what might be behind that is there a real sense here that the economy has perhaps changed in some way that uh higher rates will be needed in the future thank you so you're right they're pretty modest changes but you're right there was an uptick in in the longer run rate and um uh and also there's a 25 basis point increase in in 25 and 26 in terms of um our rates going to be higher in the in the longer run if that's really your question I I don't think we know that um I I think uh it's it's we think that rates were generally low during the pre-pandemic post Global financial crisis era for for reasons that are mostly you know uh important slow moving large things like demographics and productivity and and and that sort of thing things that don't move quickly um but I don't think we know I mean I my instinct would be that rates will not go back down to the very low levels that we saw where all around the world there were long run rates that were at or below zero uh in some cases I I don't see rates going back down to that level but I think there's tremendous uncertainty around that great and just a quick follow on the projections you also have uh 2.6% core inflation for the end of this year uh it's already at or you mentioned it being 2.8 in February I that doesn't sound like much disinflation at all so are you really are you still confident or the last press conference you sounded pretty optimistic you would get more confidence to the end of this year um is it right to say that this suggest you're not seeing a lot of disinflation this year compared to what we've seen 2023 and so forth I think that that that higher year end um number reflects the data we've seen so far this year because you're now you're now in this year so um I think that um sorry say your say your last for your question again well just are you still optimistic that you'll get the confidence you need this year I I you know I I think if you look at if you look at the SCP what it says is that um it is still likely in in in in most people's uh view that we will achieve that confidence and that there will be rate Cuts but that's really going to depend on the on the incoming data it is um the other thing is in the second half of the the year you have some pretty low readings so it might be harder to make progress as you move that 12-month window forward nonetheless um we're looking for data that confirm the kind of low readings that we had last year uh and and give us a a higher degree of confidence that what we saw was really inflation moving sustainably down to 2% toward 2% [Music] uh Gina smik the New York Times thank you for taking our questions per your comment to an that a weakening in the labor market would be a reason to potentially cut rates or at least a consideration in making a rate cut would continued strength in the labor market be a reason to hold off on rate cuts and just in general if labor Supply continued to Rebound in 2024 the way it did in 2023 what would stronger hiring and possibly stronger growth mean for the path forward on policy yeah so so if we're if what we're getting is um a lot of supply and a lot of demand and that Supply is actually feeding demand because workers are getting paid and they're spending and that's you know what you would have is potentially uh kind of what you had last year which is a bigger economy where where inflationary pressures are not increasing in fact they were decreasing so you can have that if you have the continued supply side uh activity that we had last year with uh both with um Supply chains and also with with uh growth in the size of the labor force but so strong hiring in and of itself would not be a reason to hold off on rate cuts no not not all by itself no I mean we we saw you saw last year very strong H hiring and inflation coming down quickly we now have a better sense that a big part of that was supply side healing particularly with with um growth in the labor force so in and of itself strong job grow growth is not a reason uh you know for us to be concerned about inflation NE hi chair pal Neil one with axios uh how do you assess the state of financial conditions right now and particularly in particular do you uh view the kind of easing and financial conditions since the fall is consistent and compatible with what you're trying to achieve on the inflation mandate so we think there are many different Financial conditions indicators and you can kind of you know see different answers to that question but ultimately we do think that um Financial conditions are are weighing on economic activity and we think you see that in a great place to see it is in the labor market where you've seen demand um cooling off a little bit from the extremely high levels and there I would point to job openings quits surveys uh the the um the hiring rate things like that are really demand they're also supply side things happening but I think those are demand side things happening um you know we saw that's been a question for a while we did see progress on inflation last year uh significant progress uh despite uh you know Financial conditions sometimes being tighter sometimes looser Michael mgee with Bloomberg radio and television can you give us uh more color uh on how the committee is thinking about in inflation Dynamics now uh what we've seen at the beginning of the year are they more one-off increases that will fade or is there more of a secular turn uh with Goods prices rising again and service prices staying sticky and also housing prices have been sort of the gdau of this uh cycle in that you keep expecting them to go down and they don't how does the committee see this playing out forward since you've raised your uh inflation forecast so I I see the Committees looking at at the two months of data and asking the same question you're asking and saying we're just going to have to see what the data show uh as I mentioned you can look at January which is very high reading and you can and I think many advis many people did uh see the possibility of seasonal adjustment problems there but again you don't want to you got to be careful about dismissing the the parts of the data that you don't like so um then February wasn't wasn't as high but it was higher so the question is what are we going to see you know we tend to see A Little Bit Stronger this is in the data A Little Bit Stronger inflation in the first half of the year a little bit less strong later in the year we're going to that we're going to let the data um show I don't I don't think we really know whether this is a bump on the road or something more we'll have to find out in the meantime the economy is strong the labor market is strong uh inflation has come way down and that gives us the ability to approach this question carefully and and you know feel more confident that in inflation is moving down sustainably to 2% when we take that step to begin dialing back uh our restrictive policy well you've talked about the the desire to have confidence that inflation is continually moving down has the recent uh numbers we've gotten for inflation data dented that confidence at all it certainly hasn't improved our confidence it hasn't raised anyone's confidence but confidence but I would say that the the um the story is really essentially the same and that that is of inflation coming down gradually toward 2% on a sometimes bumpy path as I mentioned I think that's what you still see we we've got nine months of 2 and a half% inflation now um we've had two months of kind of bumpy inflation we we were saying that we'll it's going to be a bumpy ride we consistently said that now here are some bumps and the question is are they more than bumps and we just don't we can't know that um that's why we are approaching this question carefully it is very important for everyone that we serve that we do get inflation sustainably down and uh I think the the historical record you know it's every situation is different but the historical record is that you you need to approach that question carefully and and try to get it right the first time and not have to come back uh and raise rates again perhaps if you if you cut inappropriately prematurely go to Edward thank you Mr chairman Edward Lawrence uh with Fox Business um I wanted to ask you uh you received a letter from um well the Federal Reserve versus independent body understanding Congress has oversight over that you received a letter from Senators Elizabeth Warren and Sheldon White House that said um calling on you to lower interest rates to cut interest rates because it says quote the potential that it may remain too high for too long has halted advances in deploying Renewable Energy Technologies and delayed significant climate and economic benefits from these projects so has higher interest rates caused that have they well first of all I respect uh you know we in our system of government it is Congress that has oversight responsibility over the FED we place a tremendous amount of importance on our engagements with Congress and always treat them with with great respect um in this case I would say those are you know our mandate our mandate is for maximum employment and price stability and the other things that we do uh and that's what we're trying to accomplish we're trying to do that in a way that sustains the strong growth we're seeing the strong labor market we're seeing but allows us to make further progress with inflation that's how we can best serve the public and leave the other issues in which in many cases are incredibly important such as those you mentioned leave those to the people who have responsibility for those there's another letter from two dozen lawmakers saying that the higher rates are squeezing the working people how do these letters affect what you guys are doing policy wise we we we receive these respect these letters with respect and we write careful responses and address concerns we listen again because we're talking to the people who in our system of government have oversight over our activity so that's but but at the end of the day we take that on board but we have to make our judgments and we have to stick to our knitting which is maximum employment price stability supervise and regulate the banks work on the payment system the things that we do um CL thank you CLA Jones Financial Times um thanks a lot for the opportunity to ask a question um as as chair of the fomc would you want to see unanimity on the committee or something close to it meaning no more than one descend before you begin cutting rates thank you I I we're very consensus oriented uh organization and we do try to achieve con uh consensus and and ideally unanimity people do disent it's something that happens life goes on and it's not a problem we've always had descents uh but and so I you know and you you you respect thoughtful descents very much um it's like you may not agree with with some arguments but you really want to understand them so you may read a book that takes a position that that you have long opposed just to understand that book so I I treat dissents with with respect as well be okay simonovich with the economist um can you hear me yes okay great um obviously inflation is some ways away from Target uh unemployment though if you look at the projection for the full year 4 4.0% uh in February uh we were already at 3.9% so quite close to the median projection are you concerned at all that not with standing the very strong jobs growth um that in fact there may be some cracks appearing in the employment Market uh you talked about a significant deterioration in the labor market being a condition for for easing rates what would constitute uh that in your books thank you so we of course monitor the it's one of our two goal variables we we all monitor the labor market very very carefully and I I don't see those cracks today I we you know we follow all the possible stories that are out there about about there being cracks but the the overall picture really is strong labor market the extreme imbalances that we saw in the early uh parts of the pandemic recovery have mostly been resolves resolved you're seeing High job growth you're seeing big increases in Supply you're seeing strong wage growth but wage growth is gradually moderating down to more sustainable levels uh in many many respects um the uh things are returning more to the their state in 2019 which we can think of as normal for this purpose that's job openings and quits and surveys of workers and and businesses are always interesting on this you know how tight is the how easy is it to find a job how hard is how easy it is to find a worker those have both those surveys have both come down so the labor Market's in it's in good shape um you know uh you do see things like the low uh the low hiring rate and people have made the argument that if if um if layoffs were to increase uh that that would that would mean that the net would be fairly quick increases in unemployment so that's something we're watching but we're not seeing it of course um initial claims are are very very low and if anything have track tracked down a little bit so watching it carefully don't see it and when I say U something I use the term unexpected weakening in the labor market so you know uh we do expect the unemployment rate to you know the forecast is that it would move up I think close to what we see as the longer R sustainable level that's just a that's just people's forecast individual forecasts but um we're talking about something that's unexpected that's that's where I'll leave it though Steve Steve Matthews with Bloomberg uh you mentioned at the beginning of the press conference that it that the committee felt it might be appropriate to slow the pace of asset runoff fairly soon I'm wondering is when you say fairly soon does that mean that the committee would uh meet about this again in May and a decision could be reached that soon and I was wondering if you could also just describe the the scope of what the committee is discussing here you're at $95 billion of of U caps right now would that be cut about in half or something in that nature thank you um so that is what we're discussing essentially is is um and we're not discussing all the other many other balance sheet issues we will discuss those in the in due course but what we're really looking at is is uh slowing the pace of runoff there isn't much runoff among NBS in NBS right now but there is in treasuries and we're talking about going to a lower Pace I don't want to give you a specific number because we haven't made a haven't made had an agreement or a decision but that's that's the idea um and uh that's what we're looking at and and in terms of the timing I said fairly soon I wouldn't want to try to be more specific than that but you get the idea um the the idea is and this is in our in our longer run plans that we may actually be able to get to a lower level because we would avoid the kind of frictions that can can happen liquidity is not evenly distributed in the system and there can be times when in the aggregate reserves are are ample or even abundant but not in every part and and those those parts where they're not ample there can be stress and that can cause you to prematurely stop the process to avoid the stress and then it would be very hard to restart we think so as something like that happened in in 19 perhaps so um so that's what we're doing we're looking at what would be a good time and what would be a good structure and you know fairly soon is words that we use to mean fairly soon and will there be a discussion about returning to an all treasuries balance sheet at some point so that our our longer run goal is is to a return to a a balance sheet that is mostly treasuries I do expect that once we're through this um we'll we'll come back to the other issues about the composition and the maturity and revisit those issues but it's you know not urgent right now we want to get want to get this uh this decision made first and then we can when the time is right come back to the other issues Victoria hi Victoria Guido with Politico um also on the balance sheet um you know can you talk a little bit about how the outlook for the banking sector might impact your balance sheet plans do you worry that as deposits start to shrink that we could see more turbulence you know we'll we'll be watching carefully but one of the reasons we're we're slowing down we will soon enough uh fairly soon I should say slow down is that uh we want to avoid any any kind of uh of of that of turbulence I wasn't thinking particularly about bad banking sector turbulence but um we and we we had some indicators uh the last time this is our second time in in in doing this and I think we're we're going to be paying a lot of attention to the the things that started to happen and that foreshadowed what eventually happened at at the end of that tightening cycle where we where we wound up in a short Reserve situation and we don't want to do that again and I think now we have a better sense of what are the indicators it isn't it wasn't so much in the banking system as it was around for example um where federal funds is trading relative to the administered rates and where where secured rates are relative to the to the administered rates those sorts of things we will always be watching the banking system for for similar signs though well is it also because you're not sure exactly how the reserve Supply will react once the overnight reverse repo facility you know drops nearer at zero I well I think we broadly think that once the overnight repo uh stabilizes either at zero or close to zero that as the balance sheet shrinks we should expect that reserves will decline pretty close to dollar for dooll with that that's what we think got a jean hi chair P Gan young with m& market news um I wanted to ask also about the balance sheet um will you you said that starting the taper sooner could get to get you to a smaller balance sheet size um does that mean you don't have to make a decision on when to end QT at this point and and um will you be setting up um the process for deciding that sooner or or will you wait until we're close to end so uh it's sort of ironic that by going slower you can get farther but that's the idea the the idea is that um with a smoother transition you won't you'll run much less risk of uh kind of liquidity problems which can grow into shocks and which can cause you to stop the process prematurely so so that's that's we in terms of How It Ends um we're going to be monitoring carefully uh money market conditions and asking ourselves what whether they what they're telling us about reserves are they right now we would characterize them as abundant and what we're aiming for is ample and you know which is a little bit less than abundant so um there isn't a you know there's not a dollar amount or a percent of GDP or anything like that where we we think we have a really pretty clear understanding of that we're going to be we're going to be looking at what what these you know what's happening in money markets uh in particular a bunch of different indicators including the ones I mentioned to tell us when we're getting close then though you re you reach a point ultimately where you stop uh allowing the balance sheet to run off and you but then from that point there's another period in which non- reserves Li non-reserve liabilities grow organically like currency and that also shrinks Reserves at a very slow pace so you have a you have a you know a a slower pace of runoff uh which we'll have uh fairly soon then you have another time where you where you you effectively hold the balance sheet constant and allow non-reserve liabilities to expand and then and then that that ultimately brings you ideally in for you know bring brings it into a nice easy Landing uh at at a level that is above you know above what we think the lowest possible ample number would be we're not trying for that we're we want to have a cushion a buffer because we know that demand for uh reserves can be very volatile and we we don't want to again find ourselves in a situation where there aren't reserves we have to turn around and you know buy assets and put reserves back in the banking system the way we did in 201920 hi Nancy Marshall ginzer with Marketplace chair Paul um you said you're waiting to become more confident that inflation is getting to your 2% goal before you cut rates can you just sum up more specifically what data you're looking at that would give you that confidence sure so we're most importantly we're looking at the incoming inflation data and the contents of it and what they're telling us so that'll be and also the the various components so obviously that's what we want we want more confidence that inflation uh is coming down sustainably toward 2% uh and I mean of course we'll also be looking at all the other things that are happening in the economy we'll look at the totality of the data including everything essentially as we make that assessment but the most important thing will be the inflation data that coming in but are there things that you would give more weight to like wages wages is one thing we don't our our Target is not wages it's really inflation we but we would we would look to the fact that um wages are still coming in very strong but but they've been wage increases that is to say wage increases have been have been quite strong but they're they're gradually coming down to levels that uh are more sustainable over time and and that's what we want uh we don't think that the inflation was not originally caused we think I don't think by by mostly by by wages that wasn't really the story um but we do think that to get inflation back down to 2% sustainably we'd like to see you know continuing gradual movement of wage increases at still high levels but back down to levels that are that are more sustainable over time good Greg thank you uh Greg Rob from market watch chair pal could you say at this meeting whether there were more officials who wanted to be careful and go slower than about rates than were in at the last meeting was there was there that sense of maybe it's a it's smart to to wait thanks I I guess I put it this way um the if you look at the incoming inflation data that we've had for January and February I think very broadly that um suggests that we we were right to to wait until we're more confident so I think I think you know I I didn't hear anyone dismissing it as as not information that we should look at or anything like that so I think generally speaking it does go in the direction of saying yes it's it's it's appropriate for us to be careful as we approach this question thanks chair pal Brendan Peterson with punch bow news um I wanted to ask you about Central Bank digital currency stuff um we've been hearing a lot from republicans in Congress about what the FED is or isn't doing in a digital dollar um but folk I know you have said to Congress that you are going to wait for approval before the FED does anything uh launches anything but folks like House Majority Whip Tom Emer have said that the FED is either actively researching or hiring Personnel to study the implications of a cbdc can you give us any Clarity on what the FED is doing right now on a digital dollar sure so I think we've been pretty transparent on this but I will uh I'll try harder um so we uh we are not getting ready to prop we haven't proposed we haven't come to a conclusion that we should propose or anything like that a that Congress consider legislation to authorize a digital dollar and it would take legislation by Congress signed by the president to to give us the ability to do the what we think of as a cbdc which is really a retail cbdc with with the public of so so we're just a long long way from that what we are doing and I think what every major Central Bank is doing is we're we're trying to stay in the frontiers of what's going on in digital finance and it has many many different uh areas you know it has applications in wholesale Finance in in the payment system and so we need we to serve the public we need these these issues have become very front burner in the last five or six years we need to be knowledgeable about all that so we actually do have people trying to understand things that are but but it's wrong to say that we're working on a cbdc and then we've got secretly got a lab here where we've got one and we're just going to spring it on Congress at the right moment we don't not I I haven't at all in my own mind made a decision that I think think this is something the US should be doing uh you know I just think it's something we need to be we need to understand and we do have people who are keeping up with that as part of the broader payments landscape that's that's how I would characterize it mark thank you it's Mark hamri with Bankrate Mr chairman April 27th will Mark the 13th anniversary since a Fed chairman began holding regular news conferences how important has that higher transparency been in your view both for the proper functioning of the Central Bank uh and also in accomplishing your mission and is there more that you and your colleagues can do on the transparency front and what might that look like I I generally think um I this this movement actually started you know 30 years ago more 30 years ago um when some academics uh posited that a more transparent Central Bank if the public understands your reaction function the markets will do your work for you they'll react to the data and and so it all happens that way and so there's been a March toward greater and greater transparency and um that certainly chairman banki Advanced that so chairman greenpan did Cher Ellen did and I you know so we went from four four press conferences a year to eight so now every every meeting really is live now I think that's a good Innovation I I wouldn't I wouldn't want to turn it back we also have done a bunch of other things uh you know we we have a annual uh supervision report Financial stability report um I mean there's a long list of things that we've done I think you um I mean nothing comes to mind as really desperately in need of doing at this moment we're very transparent we have no shortage of fomc participants speaking to the public through the media and so that that channel is full I would say um so I think I think it's generally broadly helped and made things better but not every day and in every way well the followup has there ever been a day where you wanted to put that Genie back in the bottle somewhat of course [Laughter] not let's go to Jennifer for the last question thank you chair pal Jennifer sha Berger with Yahoo finance uh not to harp too much more on confidence in inflation but you did say earlier in this press conference that the recent inflation data hasn't raised anyone's confidence but when you testified before the Senate a couple weeks ago you told lawmakers that you are quote not far from receiving the confidence needed on inflation to begin cutting rates so are you still of that belief or not what are we to take by those words not far so let me say my my main message at that um uh in those two days of hearings was really that the Comm the committee needs to see more evidence to build our confidence that inflation is moving down sustainably toward our 2% goal and we don't expect that it will be appropriate to begin to reduce rates until we're more confident than that is the case I that that is the case I said that any number of times so those were kind of the main part of the message we repeated that today uh in our statement I also to the language you mentioned I I I really pointed out that we had made significant progress over the past year and what we're looking for now is confirmation that that progress will continue um uh we had a series of in of um inflation readings over the second half of last year that were were really much lower uh we didn't overreact as I mentioned but that that's what I had in mind but given that you said that pce for February 2.8% the estimate and that we have been seeing PC Court PC coming down by 10 per every month I mean wouldn't you be at about 2.4% this summer June July to a point where you could cut then well you know we'll just have to see how the data uh the data come in um we would of course love to get great inflation data we got really good inflation data on the second the second part of last year again we didn't overreact to it we said we needed to see more and uh we said it would be bumpy and now we have January and February which I've talked about a couple of times so you know we're looking for for more good data we would certainly welcome it thank you thank you thank you

Channel: Federal Reserve

Views: 44,203

Keywords: Federal Reserve, Federal Reserve Board, The Fed, FOMC, Jay Powell, interest rates, Jerome Powell

Id: UYnc6bsgkJQ

Length: 47min 59sec (2879 seconds)

Published: Wed Mar 20 2024